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ECONOMIC ORIGINS
OF JEFFERSONIAN DEMOCRACY

THE MACMILLAN COMPANY

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ECONOMIC ORIGINS

JEFFERSONIAN DEMOCRACY

CHARLES A. BEARD

PROFESSOR OF POLITICS IN COLUMBIA UNIVERSITY

THE MACMILLAN COMPANY
1915

COPTRIGHT, 1916,

bt the macmillan company.

Set up and electrotyped. Published September, 1915.

T-K
17/

CcP ^

J. 9. Cnshlng: Co. — Bsrwirk <fe Smith Oo
Norwood, Mass., U.S.A.

" We may trace the contest between the capitalist and the
democratic pioneer from the earliest colonial days."

Professor Frederick J. Turner, in the American
Historical Review, Vol. XVI, p. 227.

PREFACE

One of the most brilliant of the younger historians in
the United States, Professor Carl L. Becker, of the Uni-
versity of Kansas, has prophesied that American history
will shortly be rewritten along economic lines. This col-
lection of essays on the first decade of politics under the
Constitution is intended to be a modest contribution to
the fulfilment of that prophecy.

In the preparation of the volume I have been laid under
deep obligation to one of my students, Mr. C. J. Hendley,
who spent many weeks with me examining pamphlets and

newspapers.

CHARLES A. BEARD.

Columbia University,
July 30, 1915.

TABLE OF CONTENTS

— h .^.1 The Federalist-Republican Antagonism and the Con-
flict OVER THE Constitution 1

II. The Party Affiliations of the Members of the Con-
vention ^*

tTHE Personnel of the First Administration . . 85

The Constitution in Operation 108

Hamilton's System before Congress 132

Security Holding and Politics 165

VII. The Economic Conflict as reflected in Republican Lit- ^

ERATURE 1^^

— s» CYnX< The Federalist Analysis of the Party Conflict . 221

-^ .IX. Anti-Federalist Resistance to Taxation . . • 248

[Xy^ The Economics of the Jay Treaty 268

■^y The Political Economy of John Adams .... 299

^Ej^-^ The Politics of Agrarianism 322

■^ Xm. The Great Battle of 1800 353

-^^ , XIV. Jefferson's Economics and Politics 415 ^

3 2.

3 i

ECONOMIC ORIGINS OF
JEFFERSONIAN DEMOCRACY

CHAPTER I

THE FEDERALIST-REPUBLICAN ANTAGONISM AND THE CON-
FLICT OVER THE CONSTITUTION

An examination into the origins of Jeffersonian Democracy
naturally opens with an inquiry whether there was any
connection between that party and the large body of citizens
who opposed the establishment of the Constitution of the
United States. In the struggle over the adoption of that
instrument, there appeared, it is well known, a sharp an-
tagonism throughout almost the entire country. The views
of competent contemporary observers and of modern stu-
dents of the period are in accord on that point. Of this
there can be no doubt. Chief Justice Marshall, a member
of the Virginia ratifying convention and a Federalist of
high standing, who combined with his unusual opportunities
for personal observation his mastery of President Washing-
ton's private correspondence, informs us that the parties to
the conflict over the Constitution were in some states evenly
balanced; that in many instances the majority in favor of
the new system was so small that its intrinsic merits alone
would not have carried the day, that in some of the adopting
states a majority of the people were in the opposition, and
that in all of them the new government was accepted with

B 1

2 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

reluctance only because a dread of dismemberment of the
union overcame hostility to the proposed fundamental law.^
A half a century after Marshall thus described the contest
over the ratification of the Constitution, Hildreth, a patient
and discriminating student of the Federalist period, on turn-
ing over the sources in a fresh light, came to the same con-
clusion.2 He frankly declared that it was exceedingly
doubtful whether, upon a fair canvass, a majority of the
people, in several of the states which ratified the Constitu-
tion, actually favored its adoption ; that in the powerful
states of Massachusetts, New York, Pennsylvania, and
Virginia, the majority in favor of the new frame of govern-
ment was very uncertain, so uncertain, in fact, as to raise
the question whether there had been any majority at all ;
and that everywhere the voters of the states were sharply
divided into two well-marked political parties. Bancroft,
whose devotion to the traditions of the Constitution is
never to be questioned, was no less emphatic than Hildreth
in his characterization of the contest for the new pohtical
order as a hard-fought battle ending in victory snatched
from the very jaws of defeat.^ From the day of Hildreth
and Bancroft to this, no serious student of the eighteenth
century has doubted at least the severity and even balance
of the conflict over the Constitution. Only those publicists
concerned with the instant need of political controversies
have been bold enough to deny that the fundamental law
of the land was itself the product of one of the sharpest
partisan contests in the history of the country.

This stubbornly fought battle over the Constitution was
in the main economic in character, because the scheme of
government contemplated was designed to effect, along

« Life of Washington (2d ed.). Vol. II, p. 127.

» Hildreth, History of the United States (1856), Vol. IV, pp. 25 ff.

» History of the Constitution of the United States (18S2), Vol. II, pp. passim.

THE FEDERALIST-REPUBLICAN ANTAGONISM 3

with a more adequate national defence, several commercial
and financial reforms of high significance, and at the same
time to afford an efficient check upon state legislatures
that had shown themselves prone to assault acquired prop-
erty rights, particularly of personalty, by means of paper
money and other agrarian measures. To speak more
precisely, the contest over the Constitution was not pri-
marily a war over abstract political ideals, such as state's
rights and centralization, but over concrete economic
issues, and the political division which accompanied it was
substantially along the lines of the interests affected — the
financiers, public creditors, traders, commercial men, manu-
facturers, and allied groups, centering mainly in the larger
seaboard towns, being chief among the advocates of the
Constitution, and the farmers, particularly in the inland
regions, and the debtors being chief among its opponents.
That other considerations, such as the necessity for stronger
national defence, entered into the campaign is, of course,
admitted, but with all due allowances, it may be truly said
that the Constitution was a product of a struggle between
capitalistic and agrarian interests.

This removal of the Constitution from the realm of pure
political ethics and its establishment in the dusty way of
earthly strife and common economic endeavor is not, as
some would have us believe, the work of profane hands.
It has come about through the gathering of the testimony
of contemporary witnesses of undoubted competency and
through the researches of many scholars. Although in the
minds of some, the extent of the economic forces may be
exaggerated and the motives of many leaders in the forma-
tion and adoption of the Constitution may be incorrectly
interpreted, the significant fact stands out with increas-
ing boldness that the conflict over the new system of

4 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

government was chiefly between the capitaHstic and agrarian
classes.

Occupying an influential position in the former of these
classes were the holders of the state and continental debt
amounting to more than all the rest of the fluid capital in
the United States. No less an important person than
Washington assigned the satisfaction of the claims of the
public creditors as the chief reason for the adoption of the
Constitution, for he held that unless provisions were made
for the payment of the debt, the country might as well
continue under the old order of the Articles of Confedera-
tion. ^'I had endulged the expectation/' he wrote to Jef-
ferson, "that the New Government would enable those en-
trusted with its administration to do justice to the public
creditors and retrieve the National character. But if no
means are to be employed but requisitions, that expectation
will be in vain and we may well recur to the old Confedera-
tion." 1

Without doubting the fact that the standard of honor
which Washington here set up was a consideration in the
minds of many, it is no less a fact that the numerous holders
of the public debt themselves formed a considerable centre
corps in the political army waging the campaign for the
adoption of the Constitution. For instance, a prominent
Federalist of Connecticut, Chauncey Goodrich, a man placed
by his connections and experience in a position to observe
closely the politics of that and surrounding states, wrote,
in 1790, that "perhaps without the active influence of the
creditors, the government could not have been formed, and
any well-grounded dissatisfaction on their part will make
its movements dull and languid, if not worse." '^ The will-

• Documentary History of the Constitution, Vol. IV, p. 40.

• Gibbs, Administrations of Washington and Adams, Vol. I, p. 37.

THE FEDERALIST-REPUBLICAN ANTAGONISM 5

ingness of a number of Northern men to break up the Union
before the new government was fairly launched because
they could not secure a satisfactory settlement of the debt
is proof that Goodrich had correctly gauged the weight of
the public creditors in the battle for the Constitution.

To the testimony of Virginia and Connecticut in this
matter of the influence of public creditors and allied interests
in the formation and ratification of the Constitution we may
add that of New York, then as now one of the first financial
centres, speaking through a witness of such high authority
that the most incredulous would hardly question it, — Alex-
ander Hamilton, the first Secretary of the Treasury under the
new system. He had been a member of the Convention
which drafted the Constitution. He was intimately asso-
ciated with the leaders in the movement for ratification.
He shared in the preparation of that magnificent polemic,
The Federalist. But above all, he was, as Secretary of the
Treasury, in full possession of the names of those who
funded continental and state securities after the Constitu-
tion was adopted. No one in all the United States, there-
fore, had such excellent opportunities to know the real
forces which determined the constitutional conflict. What
Goodrich could surmise, Hamilton could test by reference
to the Treasury ledgers at his elbow. That the public
creditors were "very influential" and the allied property
interests, that is, in the main, capitalistic interests, were
"very weighty" in securing the adoption of the Constitu-
tion, he distinctly avowed, although he wisely refrained
from estimating exactly their respective values in the con-
test. In an unfinished manuscript on the funding system,
he considered this matter at length, saying: "The public
creditors, who consisted of various descriptions of men, a
large proportion of them very meritorious and very influen-

6 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

tial, had had a considerable agency in promoting the adop-
tion of the new Constitution, for this peculiar reason, among
the many weighty reasons which were common to them as
citizens and proprietors, that it exhibited the prospect of a
government able to do justice to their claims. Their dis-
appointment and disgust quickened by the sensibility of
private interest, could not but have been extreme [if the
debt had not been properly funded]. There was also an-
other class of men, and a very weighty one, who had had
great share in the establishment of the Constitution, who,
though not personally interested in the debt, considered
maxims of public credit as of the essence of good government,
as intimately connected by the analogy and sympathy of prin-
ciples with the security of property in general, and as forming
an inseparable portion of the great system of political order.
These men, from sentiment, would have regarded their labors
in supporting the Constitution as in a great measure lost ;
they would have seen the disappointment of their hopes in
the unwillingness of the government to do what they es-
teemed justice, and to pursue what they called an honorable
policy ; and they would have regarded this failure as an
augury of the continuance of the fatal system which had for
some time prostrated the national honor, interest, and happi-
ness. The disaffection of a part of these classes of men
might have carried a considerable reinforcement to the
enemies of the government." ^

Other contemporaries stressed other features in the con-
flict, but nevertheless agreed that it had been primarily
economic in character. For instance, Fisher Ames, of
Massachusetts, who had been a member of the state ratify-
ing convention, laid emphasis upon the commercial rather

• Hamilton, Works (Lodge ed.). Vol. VII. p. 418. The smaller edition, not the
Federal edition, ia cited throughout this volume.

THE FEDERALIST-REPUBLICAN ANTAGONISM 7

than the financial aspects of the constitutional battle.
Speaking in the House of Representatives, on March 28,
1789, he said: "I conceive, sir, that the present Constitu-
tion was dictated by commercial necessity more than any
other cause. The want of an efficient government to secure
the manufacturing interests and to advance our commerce,
was long seen by men of judgment and pointed out by
patriots solicitous to promote our general welfare." ^ The
inevitable inference from this remark is that, in Ames's
opinion, men of commercial and manufacturing interests
must have seen the possibilities of economic advantage in
the adoption of the Constitution, and naturally arrayed
themselves on its side.

More than a decade after the conflict over the Constitution,
when many of the great actors in that drama had passed
away, and there had been ample time and opportunity to
reflect deeply upon the nature and causes of that struggle,
Chief Justice Marshall described it, in effect, though not in
exact terms, as a war between mercantile, financial, and
capitaHstic interests generally, on the one hand, and the
agrarian and debtor interests, on the other.'^ Half a cen-
tury later, Hildreth, whose work has been cited above,
came to substantially identical conclusions. He declared
that "in most of the towns and cities, and seats of trade
and mechanical industry, the friends of the Constitution
formed a very decided majority. Much was hoped from the
organization of a vigorous national government and the
exercise of extensive powers vested in it for the regulation
of commerce." In North Carolina and Rhode Island, the
states which first rejected the Constitution, Hildreth con-
tinued, the trouble was the state paper money which de-

1 p. W. Ames, Speeches of Fisher Ames, p. 12.

* Beard, Economic Interpretation of the Constitution, p. 296.

8 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

stroyed the rights of creditors. In Massachusetts he found
the "weight of talent, wealth, and influence" on the Federal
side. In Virginia, the opponents of the Constitution in-
cluded many of the great planters and "the backwoods
population almost universally," and the opposition of the
planters was to be, in part, ascribed to the fear of having
to pay their debts due to British merchants in case the Con-
stitution went into effect. In New York it was the City and
the southern counties, not the interior agricultural regions,
that supported the new scheme of national government.^

By a strange coincidence, Charles Francis Adams gave
to the world the same economic interpretation of the Con-
stitution in the very year that Hildreth published his his-
tory. In his life of his grandfather, the President, Mr.
Adams, who enjoyed the unrivalled advantage of having
access to documents closed to all his contemporaries, repre-
sented the adoption of the fundamental law of the United
States as a triumph of property over the propertyless. The
social disorder which preceded the federal Convention of
1787, Mr. Adams attributed to "the upheaving of the poorest
classes to throw off all law of debtor and creditor," and the
Convention itself, he declared, "was the work of commercial
people in the seaport towns, of the planters of the slave-
holding states, of the officers of the revolutionary army, and
the property holders everywhere. . . . That among the
opponents of the Constitution are to be ranked a great
majority of those who had most strenuously fought the
battle of independence of Great Britain is certain. . . .
Among the federalists, it is true, were to be found a large
body of the patriots of the Revolution, almost all the general
officers who survived the war, and a great number of the
substantial citizens along the line of the seaboard towns

» Op. cit., Vol. IV, pp. 25 fif.

THE FEDERALIST-REPUBLICAN ANTAGONISM 9

and populous regions, all of whom had heartily sympathized
in the policy of resistance. But these could never have suc-
ceeded in effecting the. establishment of the Constitution,
had they not received the active and steady cooperation
of all that was left in America of attachment to the mother
country, as well as of the moneyed interest, which ever points
to strong government as surely as the needle to the pole." ^

That which representative men of the eighteenth century
definitely understood, and Hildreth implied in a somewhat
rambling fashion was completely demonstrated by Profes-
sor 0. G. Libby in his study of the Geographical Distribu-
tion of the Vote on the Constitution in the Thirteen States:
the support for the Constitution came from the centres of
capitalistic interest and the opposition came from the
agrarians and those burdened with debts. To adduce
further evidence in support of Professor Libby's thesis is
merely to add documentation to that which has been satis-
factorily established.'^

Inasmuch as the country was sharply divided over the
ratification of the Constitution, and along fairly definite
economic lines, it is natural to assume that these divisions
did not disappear when the new government began to carry
out the specific policies which had been implied in the lan-
guage of the instrument and clearly seen by many as neces-
sary corollaries to its adoption.^ It was hardly to have
been expected that the bitter animosities which had been

1 C. F. Adams, The Works of John Adams, Vol. I, p. 441.

* Beard, Economic Interpretation of the Constitution. It is curious that this vol-
ume raised such a storm of criticism in certain quarters when the leading ideas set
forth in it had long been accepted by students of the economic aspects of American
history.

• Economic Interpretation, Chap. XI. "In the friends of the new constitution,
denominated federalists, as well as in its opponents, called anti-federalists, are to
be seen the germs of the great political division of the country, which now sprang
up and continued to prevail during the existence of at least one generation of men."
C. F. Adams, Works of John Adams, Vol. I, p. 442.

10 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

aroused by that contest could be smoothed away at once
and that men who had just been engaged in an angry
poUtical quarrel could join in fraternal greetings on the
following morning. Many of the older historians assumed,
therefore, without a detailed analysis of the facts in the
case that the party division over the adoption of the Con-
stitution formed the basis of the Federalist-Republican an-
tagonism which followed the inauguration of the government.
Nevertheless, two careful students. Professor Bassett and
Professor Libby, have recently given their support to the
proposition that the political alignments which ensued over
the ratification of the Constitution were not carried over
into Washington's administrations but disappeared when
the instrument was actually adopted. Professor Bassett
informs us that "the Federalist party of 1787-1788 was not
the same as the Federalists of 1791 : the former embraced
all those who desired to save the country from the chaos
of the government under the Articles of Confederation ; the
latter included those who supported Hamilton in his plans
for conducting the affairs of the country. Many who acted
with Hamilton in 1788 were not with him three years later ;
but this does not mean that if the old problems had to be
faced again such men would be opposed to their former
position. The problems of 1791 were new problems ; they
had to do, not with union or chaos, but with two clearly
defined lines of internal policy. After the completion of the
ratification of the Constitution in 1788, anti-Federalism
died because its raison d^itre was gone. Although a few
threats were made later to dissolve the Union, notably by
Massachusetts when it seemed that assumption was defeated,
such a policy received no serious support from any consider-
able number of men." ^

> The FederaZiat System, p. 42. As a matter of fact, very few of the Anti-Fed-
eralists ever favored the complete dissolution of the Union.

THE FEDERALIST-REPUBLICAN ANTAGONISM 11

This is a strong statement and it is so fundamental for
the purposes of the study before us that it deserves the most
careful and critical examination. A part of it is highly
speculative, to say the least. We are informed that the
constitutional__Federalists were not identical with tha_
Tederalists of 1791, and that the later Federalists in-
cludedniTtheir ranks only those who supported Hamilton.
Of course the statistical materials for demonstrating such
a proposition — which rests of course upon facts susceptible
of enumeration — are not forthcoming, and indeed cannot,
from the nature of our records, ever be forthcoming in any
adequate manner. But letting the statement stand, we
may ask: "Were not those who supported Hamilton's
fiscal measures drawn almost wholly from 'those who desired
to save the country from the chaos of government under
the Articles of Confederation'?" Again we may ask:
"Did not those who were opposed to saving the country
from chaos constitute the bulk of the party that opposed
Hamilton's measures?" It might be possible, therefore, by
one interpretation to accept Professor Bassett's dictum on
this point and yet hold that the party division over the
ratification of the Constitution formed, in the main, the
basis of the division into Federalist and RepubUcan after
1789.

Finally, serious objection may be justly taken to the state-
ment that the problems of 1791 were "new problems." On
the contrary, they were exactly the problems which had been
raised during the conflict over ratification : the adjustment
of the federal and state debts, the regulation of commerce,
the enforcement of the terms of the British treaty, the settle-
ment of land titles in Virginia and other Southern states,
the payments of debt due principally in the South to British
creditors, the establishment of the currency on a sound

12 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

basis, and the restraint of the states in their attacks on
property. Men divided during ratification because they
knew that the adoption of the Constitution meant in a
general way the settlement of these momentous matters,
and after the new government was inaugurated men divided
over the concrete measures which expressed the principles
laid down in the Constitution. After all, principles must
find their embodiment in certain men or groups of men,
and the question in 1791 was practically the same as in
1787: "Who shall rule and how?" Hamilton knew this,
Washington knew it, the wisest men of the time knew it,
and that accounts for their extreme solicitude about the
election of the "proper" persons to form the living expres-
sion of the new instrument of government.^

Professor 0. G. Libby, whose work on the adoption of the
Constitution gives special weight to his words on the sub-
ject, is no less emphatic than Professor Bassett on the point
that the FederaUst and Anti-Federalist division of 1787-
1788 was not the basis of the later Federahst-Republican
cleavage.^ He flatly says that it is a "fallacy" to hold that
the divisions obtaining during the struggle over the adop-
tion of the Constitution were continued into Washington's
administration, and adds: "In considering the factional
divisions during the administrations of Washington, one
must bear in mind that the issue that had divided Federalist
from Anti-FederaUst, namely, the adoption of the new Con-
stitution, no longer existed in 1789, with the inauguration
of our first President. Consequent upon the passing away
of this particular issue, the two parties that had fought over
it had also passed away in every one of the original thirteen
states, except perhaps in the faction-ridden state of Rhode

' Sec below, pp. 87 S.

* Articles in The Quarterly Journal of the University of North Dakota, Vols.
II and III.

THE FEDERALIST-REPUBLICAN ANTAGONISM 13

Island. So simple and plain a proposition as this seems to
have given endless trouble to historians." ^

Professor Libby goes even further. He denies that there
was any real party cleavage during the administrations of
Washington and Adams. Factional controversies and per-
sonal animosities, he admits, were abundant, but genuine
party divisions did not exist. The funding and assumption
measures did not produce parties. JefTerson labored in
vain during Washington's first administration to build up
an organization; but Washington by his judicial conduct
and skilful management prevented the formation of nationatl
parties. "The almost immediate success of the new bank
and the general satisfaction it gave to the taxpayers as well
as to the moneyed interests put it out of reach as a party
issue for the future.'^ . . . The immediate success of
Hamilton's initial revenue and financial measures and the "^
wise caution of Washington's foreign policy left no room for^
party organization. In characterizing this period, there-
fore, we may call it a purely transitional one as far as party
organization is concerned. It was fruitful in private
jealousies and factional and sectional animosities. Men ^
were intolerant of each other and the newspapers poured
the foulest abuse upon opponents, sparing not even the
most blameless. The experiment of administering the
national government under the new instrument had proved
a success."^

It was not until the administration of John Adams, accord- 1'
ing to Professor Libby, that a real political party began to'
come into existence, and it was the alien and sedition laws
that afforded Jefferson the opportunity to create a genuine

» hoc. ciL, Vol. Ill, p. 294.

* The pamphlet and periodical literature of the decade from 1790 to 1800 does
not bear out this assertion. On the contrary the Bank was one of the leading issues
of the period. See below, Chap. VII. « Loc. ci<., Vol. II, pp. 218, 219.

14 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

political organization. "Jefferson, alone, of all the public
men in America, grasped the full significance of the mistake
made by Adams and his supporters. He saw as clearly as
did Hamilton the storm of denunciation which would de-
scend upon them for their unwarranted severity towards
our alien residents and for the inexcusable blunder of the
Sedition laws, that menaced freedom of speech and of the
press. . . . From his long residence in Europe and his
travels in several countries, he was conversant with indus-
trial and social conditions there as was no one else in America.
The French Revolution had opened his eyes to the grievances
of the down trodden masses. He was aware how their
thoughts had been turning toward America, as the land
where Uberty and equality were more than a theory and
where there was land and a home for all. He had watched
the diplomatic situation of France carefully and had sensed
the meaning of that long and exhausting war which had
already begun to rage in Europe. The interruption of
peaceful occupations and the devastation wrought by hostile
invasion would inevitably turn adrift numberless artisans,
farmers, and day laborers. Their natural goal was America.
... As a typical Virginian he had unbounded faith in the
potentialities of the new West and he reaUzed how vitally
important it was that every possible stream of population
should be made to flow into these vacant lands. With
prophetic insight he saw the forward sweep of population
farther and farther westward. . . . Thus he launched the
new Republican party on the ample platform of national
expansion. The French Revolution had proclaimed liberty
and equality for all mankind. Jefferson now made con-
crete application of the principle by announcing as the
surest basis of national well-being the free citizens living
under its laws, the men of many nations, assembled under

THE FEDERALIST-REPUBLICAN ANTAGONISM 15

our flag to enjoy the blessing of a free state. In the march
of events having a world-wide import, Jefferson had seized
the psychological moment to offer himself as a leader with
a message of deepest moment for the humble and oppressed /
of every land. . . . The Presidential election of 1800 marks
a turning point in our national history no less important
than does the adoption of our present Constitution. It
signahzed the initial victory of the first political party which
professed to represent the American people. The career of
this party is in complete contrast with the vacillating course
of the shifting factions described in the administrations of
Washington and Adams." ^

After these generalities, Professor Libby descends to
particulars. Starting with a somewhat strict definition of
the term "party," he analyzes the votes in the first House
of Representatives during Washington's administrations.
Of the measures which arose in the first Congress he selects
twenty-one "that may properly be considered as national,
as having a bearing on the central administration in any
vital way." He then treats these as "administration
measures," and records the vote for and against each one.
Grouping the votes, he finds twenty-four members consist-
ently supporting the government, seven consistently oppos-
ing, and thirty-one divided in their votes. Applying the
same method to the votes in the House during the second
Congress, Professor Libby finds "that thirty-two gave a
large majority of their votes to the support of the adminis-
tration, twenty-three were in the opposition, and fourteen
were fairly divided in their vote." Commenting on this,
he adds : "Compared to the showing in the first Congress,
there seems to have been a very decided grouping into some-
thing approaching parties. But the defeat on the culmi-

1 Loc. cit.. Vol. II. pp. 221 ff.

16 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

nating issue at the end of the session [censuring the Secre-
tary of the Treasury] showed conclusively how transitory
were the affiUations that had so far held the groups together."

In the third and fourth Congresses, Professor Libby finds
even a greater lack of uniform party voting. In the third
Congress, seventeen members supported the government,
eight opposed it, while seventy-six were divided in their
votes. In the fourth Congress, twenty-four supported the
government, thirty-five were in the opposition, and fifty-
three were divided. "In summing up the votes for all four
Congresses, it will be found that the Federal Government
was supported by ninety-seven members and was opposed
by seventy-three members, a total of 170. Those members
of Congress having a vote divided in the ratio of two to
one numbered 177, a most significant fact with reference
to the nature of the factions during this whole period."

Finally, Professor Libby attacks the conclusion of Hil-
dreth, Schouler, and Henry Adams to the effect that Fed-
erahsm in 1800 was supported by professional, mercantile,
and capitalistic classes representing wealth and talents,
particularly in New England, — those sections which had
carried the Constitution to a successful ratification more
than a decade before. The election results of 1800, says
Professor Libby, do not in the least bear out this conclusion.
"From the returns of the vote by towns in the election for
governor in 1800 in Massachusetts, it can be seen from a
town map of the state that the Republicans carried Boston
and practically the entire eastern half of the state except
Essex county. . . . The Massachusetts Federalists in 1800
are from precisely the same general region as the Anti-
Federalists in 1788 and the Shays rebels of 1786. If the
opinions quoted above [from Adams] are correct, then the
wealth, talent, learning and social rank of Massachusetts

THE FEDERAUST-REPUBLICAN ANTAGONISM 17

must have migrated wholesale into the back country dis-
tricts of the state since 1788. But if we keep clearly in
mind the policies and methods of the supporters of Adams
in their reckless assault on the rights of citizens and ahens
in 1798, it will be easy to reconcile such unwisdom with the
constituencies who are their strongest supporters in 1800.
Such temper is not at all incompatible with that which in-
spired the attempted overthrow of law and order in 1786
and resisted the establishment of central government in
1788. On the other hand, the voters in eastern Massachu-
setts were far too intelUgent and progressive to support the
un-American course of the Federalists. . . . The situation
in Massachusetts may be taken as fairly typical for New
England.^ In the middle section, Pennsylvania was so
clearly with Jefferson in spite of the conservatism of her
upper house, that we must turn to New York for a com-
parison of the two parties in this election. The vote of the
New York Legislature for presidential electors, November
6, 1800, shows approximately the location of the parties at
that date.2 Thirty-nine votes, representing twelve counties,
were cast for the Federal candidates and sixty-one votes,
representing fourteen counties, were cast for the Repubhcan
candidates. An examination of the respective areas con-
trolled by the two parties shows that the Federal area had
a per capita population of 9.9 per square mile and the Re-
pubhcan area a per capita population of 20.9 per square
mile. A similar comparison for the value of real estate for
1799 shows that the Federal area, omitting the very exten-
sive and thinly populated western county of Ontario
(Federal) had a per capita valuation of $134 and the Repub-
hcan area a per capita valuation of $179.2. It is clear

■ Compare, however, the vote in Connecticut and Rhode Island in 1800. See
below, p. 379.

* See below, p. 30, for an examination of the accuracy of this statement.
c

18 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

that we have here a similar situation to that ascertained for
Massachusetts. The Federal party in New York repre-
sented country constituencies in sparsely settled regions
remote from the activity of business life and out of touch
with national progress along every line. The source of the
misapprehension concerning the election of 1800 has been
two-fold : first, the confusing of issues with party names, so
that the Federal party of 1788 is assumed to be the same
ten years later ; second, the entire omission of any transi-
tional period following the adoption of the second constitu-
tion, during the administration of Washington. Added to
this has been the faulty method of investigation upon which
rested the conclusions reached. Apparently, no effort has
been made by the historians cited to examine such returns
of the elections as are available and to determine the geo-
graphical location of the constituencies supporting the
opposing parties." ^

The important conclusions advanced by Professor Libby
on the basis of his researches may be summarized as follows :

1. No substantial party divisions were manifested during
Washington's administration, as tested by the votes in the
House of Representatives.

2. The Republican or Jeffersonian party sprang forth in
full panoply only after the enactment of the alien and sedi-
tion laws.

3. Jefferson built his party on "a group of issues involv-
ing fundamental principles in American politics and citizen-
ship," offered by the alien and sedition laws.

4. There is apparently no relation at all between the
Federal party of 1788 and the Federal party of 1800, for
the votes in the latter year show the regions of wealth and
talent to be on Jefferson's side.

J Loc. dl., Vol. II. pp. 227 fif.

THE FEDERALIST-REPUBLICAN ANTAGONISM 19

5. The Jeffersonian party was founded not on any set of
economic doctrines but upon some general principles of
American liberty.

The documentation and methods of reasoning upon
which so remarkable a thesis rests deserve careful ex-
amination. First, let us consider his denial of the existence
of parties during Washington's and Adams' administration.
Of course everything here depends upon the definition of the
term "party," and Professor Libby has not left it undefined.
On the contrary, he says : "A political party can hardly be
said to have an existence unless some issue of more than
passing or local importance lies back of its appearance and
upon which a majority of its members have taken their stand.
A second essential in a political party is that its members
and representatives are sufficiently intelligent to stand
together on all votes and elections involving the issue or
issues of the day which the party has accepted as its own.
The presence of a party leader or leaders is generally con-
sidered essential to successful continuance in the field of
politics, though this is a variable factor, subject to con-
siderable fluctuation from time to time. Lastly the parties
of a given period cease to exist when the issue that divides
them, for sufficient reason, has ceased to have any further
importance." ^

It is not often useful to quarrel over niceties in terms,
but it may be said in passing that it would be difficult, if
not almost impossible, to find in any age or any country a
political party in the strict sense used in Professor Libby's
articles.^ If we take the votes in Congress on tariff schedules
(not the formal vote on the entire bills), more frequently
than not we find a shattering of the ranks of the Republican

» Loc. cit., Vol. Ill, p. 294.

* See Lowell, The Government of England, Vol. II, pp. 71 ff. Americct,n Histori-
cal Association Report for 1901.

20 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

and Democratic parties, and yet it must be admitted that
the tariff is an issue of more than local importance over
which "parties" have divided. In the state of New York
where voters are rigidly enrolled in parties and the rank
and file have been under disciplined leadership for years,
anything like strict and continuous party divisions in
the legislature have been far more rare than such divi-
sions in the first Congress.^ We even find the anti-militarist
Social-Democrats in Germany voting for increased military
expenditures, not because they are on that side from "prin-
ciple," but because they know that in case of a defeat of the
government's proposal, a dissolution of the Reichstag would
occur and an election be held during a "patriotic" fervor.^
Indeed, it is one of the evidences of skilled leadership if a
party is able to formulate its measures in such a manner
as to break the ranks of the opposition.

A far more fundamental objection may be urged against
Professor Libby's conclusions on the ground that his methods
are not altogether invulnerable. In the first place, the
measures which he has selected as the basis of testing the
votes in the House of Representatives cannot all be treated
with the same degree of certainty as "administration meas-
ures" to which "opposition" would naturally be expected.
For example, in the first Congress the establishment of a
Department of Foreign Affairs, the compensation of members
of Congress, the salaries of officers in the executive depart-
ment, the appropriation of money for goods to be used in
negotiating Indian treaties, and the United States mint
were not propositions on which we should expect a division
based upon any fundamental interests such as those raised
by the funding, bank, and revenue bills. If we should

' Colvin, The Bicameral Principle: a Study of the New York Legislature (N. Y.,
1913). * This was written before the great events of August, 1914.

THE FEDERALIST-REPUBLICAN ANTAGONISM 21

eliminate a number of the laws which cannot properly be
called administration measures and which affected no
economic interests directly, we should find far more con-
sistency in voting and something approaching more nearly
to Professor Libby's strict definition of a party system.

The same objection may be brought against the meas-
ures of the other Congresses employed as tests of party
alignment, and particularly in the second Congress. In
this Congress there was a degree of consistency in voting
which Professor Libby admits almost amounted to a party
division, but he claims the defeat on the culminating
issue at the end of the session showed conclusively "how
transitory were the affiliations that had so far held the groups
together." Now these last measures, six in number, were
resolutions condemning the conduct of the Secretary of the
Treasury, Hamilton. It is entirely reasonable to expect a
strong defection from the opposition on these propositions,
because men who differed from Hamilton on fiscal policies
did not question his personal honesty. Furthermore, so
many members of Congress were themselves security holders
and personally involved in the operations of the Treasury
that a condemnation of Hamilton's Treasury administration
would have been a condemnation of themselves.^

Now let us take the measures selected by Professor Libby
to try out the party vote in the third Congress. For ex-
ample, he treats as "an administration measure" the resolu-
tion of non-intercourse with Great Britain, introduced on
April 7 by Clark, of New Jersey, but it is difficult to dis-
cover what valid reason can be assigned for including this
among the propositions employed to test the opposition
vote. In fact, we know from a long and important letter
written by Hamilton to Washington on April 14, 1794,

1 See below, p. 202.

22 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

seven days after Clark introduced his resolution, that
non-intercourse with Great Britain was not deemed an
organic part of Federalist policy. The views of his party
Hamilton sums up as follows : "to take effectual measures
of military preparation, creating, in earnest, force and rev-
enue ; to vest the President with important powers respecting
navigation and commerce for ulterior contingencies — to
endeavor by another effort of negotiation, confided to hands
able to manage it, and friendly to the object, to obtain
reparation for the wrongs we suffer, and a demarkation of
a line of conduct to govern in future ; to avoid till the issue
of that experiment all measures of a nature to occasion a
conflict between the motives which might dispose the
British government to do us the justice to which we are
entitled and the sense of its own dignity. If that experi-
ments fails, then and not till then to resort to reprisals and
war."

Having thus stated the policy of his party, Hamilton
then takes up a consideration of the non-intercourse resolu-
tion, and treats it as entirely contrary to the letter and
spirit of the FederaUst programme: "The proposition for
cutting off all intercourse with Great Britain has not yet
sufficiently developed itself to enable us to pronounce
what it truly is. It may be so extensive in its provisions
as even to include in fact, though not in form, sequestra-
tion, by rendering remittances penal or impracticable.
Indeed, it can scarcely avoid so far interfering with the
payment of debts already contracted, as in a great degree
to amount to a virtual sequestration. But, however
this may be, being adopted for the express purpose of re-
tahating or punishing injuries, to continue until those
injuries are redressed, it is in a spirit of a reprisal. Its
principle is avowedly coercion — a principle directly op-

THE FEDERALIST-REPUBLICAN ANTAGONISM 23

posite to that of negotiation, which supposes an appeal
to the reason and justice of the party. Caustic and stimu-
lant in the highest degree, it cannot fail to have a corre-
spondent effect upon the minds of those against whom it is
directed. It cannot fail to be viewed as originating in
motives of the most hostile and overbearing kind ; to stir
up all the feelings of pride and resentment in the nation as
well as in the Cabinet ; and, consequently, to render ne-
gotiations abortive.^ "

The policy here outlined by Hamilton was accepted by
Washington in full, as the subsequent negotiations through
Jay, and the maintenance of the Jay treaty, conclusively
show. To treat the non-intercourse resolution, therefore,
as an administration measure and to charge the New Eng-
land members with vacillation and factional spirit because
they supported the carriage tax designed to sustain public
credit and voted against non-intercourse with Great Brit-
ain which meant the destruction of New England com-
merce is surely unwarranted. The votes recorded for this
measure should be recorded against the administration and
those against the resolution should be treated as adminis-
tration votes.

There is likewise just ground for questioning the warrant
for including as tests the votes taken on the bill levying
tonnage duties on American and foreign ships, in May,
1794. This measure was one of a long Hst of provisions
designed to increase the public revenue and support the
public credit ; but it was not an essential or vital part of
them. The representatives from the New England and
middle commercial states did not relish any tax on shipping
and they were able to strike it out, with the aid of some
representatives from Southern states that were not vitally

> Works (Lodge ed.), Vol. IV, pp. 282 fl.

24 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

interested one way or another. The resolutions of which
the tonnage duties formed a part were reported to the
house from the committee of the whole on May 7, 1794,
and it is difficult to say with what justice they, in particular,
may be called administration measures.^ Even if they
were to be so included, we should naturally expect to find
the commercial interests of the Northern states against
them.

Similar exceptions may be taken to Professor Libby's
classification of measures of the fourth Congress. ^Vhy,
for instance, should the admission of Tennessee be treated
as an administration measure? Professor Libby does not
explain. The resolution in question grev/ out of a presi-
dential message sent to Congress on April 8, 1796, trans-
mitting 'papers submitted by Governor Blount, including
a census report and the new constitution of the state.
Washington cautiously remarked that, among the rights
enjoyed by the inhabitants of that territory under the
act of cession of 1792, "appear" to be the right of forming
a constitution and entering the Union. There is no proof
at all that he or that little group of advisers who consti-
tuted the heart of the administration regarded the admission
of Tennessee as a party measure in an}'- sense. ^ The resolu-
tion to admit the state was prepared and introduced by
a select committee appointed at the time Washington
transmitted the papers to Congress. Under the circum-
stances one has little warrant for charging the members
of the commercial states with factional inconsistency be-
cause they voted against admitting to the Union a back-
woods agricultural region (certain to be Republican) and

> AnnaU of Congress, 3d Con., 1793-1795, p. 653.

'In fact the FederalLsts opposed the admission of Tennessee because it was a
measure intended to help Jefferson to the presidency. American Historical Re-
view, Vol. IV, p. 652.

THE FEDERALIST-REPUBLICAN ANTAGONISM 25

voted in favor of upholding the Jay treaty which guaran-
teed the continuance of commercial relations with Great
Britain.

The truth is that it is diflScult to classify all of the acts
of Congress during Washington's administration. The
measures providing for the funding of the debt, establish-
ing the bank, maintaining the army and navy at a high
standard, keeping trade and commerce with Great Britain
open, sustaining the public credit, and clearing the Indians
off the frontier were really the only measures which can
be called "administration" in any strict sense of that
term, and on these propositions there was a striki^ig degree
of unanimity among the commercial and financial sections '
as opposed to the agrarian regions.

In fact, the politics of the period would show the sharp
party alignments required to meet Professor Libby's tests
only if the administration group had uniformly introduced
measures designed wholly in the interests of a certain class
or section. This would have been impossible, even if the
leaders in that group had thought it desirable or expedient.
After the funding of the debt and the establishment of the v*
Bank, revenue measures were among the leading proposi-
tions advanced by the administration. Revenue was in-
dispensable to the maintenance of the public credit and
the stability of the Bank and all the fiscal and financial
operations built upon them. Doubtless Hamilton and
his party would have preferred to raise revenue by means '
entirely acceptable to all sections and classes of the country,
and they relied as far as possible upon indirect taxes as
impalpable as could be devised. But such taxes were not
adequate to meet the demands for revenue, and resort to
other forms was necessary. To have refused the grants of
new duties and taxes would have been repudiation of the

26 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

debt, in a degree at least. In view of the large number of
security holders in Congress itself ^ this had become im-
possible, even if there had been popular sanction for it.
Consequently every economic resource in the country had
to be reached by federal taxes, and under the circum-
stances compromises and a resultant breaking of party
lines inevitably followed.

To show how the subsidiary measures of the Federalist
leaders often cut athwart the ranks of their own party and
enlisted support from those ordinarily classed among the
opposition is an easy matter. An incident which illustrates
the process is described by Madison in a letter written to
Jefferson, on May 11, 1794. He tells us that the report of
the committee searching for additional revenues was the
work of a subcommittee, "in understanding with the Fiscal
Department," and included besides stamp duties, excises
on tobacco and sugar manufactured in the United States,
and " a tax on carriages as an indirect tax." These measures
were highly objectionable to Madison and yet he was com-
pelled to admit, to his chagrin, that "the aversion to direct
taxes, which appeared by a vote of seventy odd for reject-
ing them, will saddle us with all those pernicious innovations,
without ultimately avoiding direct taxes in addition to them.
All opposition to the new excises, though enforced by me-
morials from the manufacturers, was vain. And the tax
on carriages succeeded, in spite of the Constitution, by a
majority of twenty, the advocates for the principle being
reinforced by the adversaries to luxury. Six of the North
Carolina members were in the majority. This is another
proof of the facility with which usurpation triumphs where
there is a standing corps always on the watch for favorable
conjunctures, and directed by the policy of dividing their

» See below, Chap. VI.

THE FEDERALIST-REPUBLICAN ANTAGONISM 27

honest but undiscerning adversaries." ^ Certainly, we are
not warranted in assuming that the opposition members of
the North Carohna group who thus voted for a FederaUst
measure underwent any change in their general partisan
feelings.

But granting, for the sake of argument, Professor Libby's
contention that there was no sharp party antagonism in the
House- of Representatives during Washington's adminis-
tration, we need not accept his conclusion that there was
no substantial party division in the country at large, that
there was no fairly consistent body of voters in general
support of the government and no fairly consistent body
of voters in general opposition to it. Why the hot battles
at the polls in nearly every important constituency if there
were only "factions" and no parties? Why did the news-
papers of the time classify candidates into Federalists and
Anti-Federahsts, if such groupings were imaginary ? More-
over are we to reject the abundant testimony of such com-
petent observers as Hamilton, Madison, Marshall, Ames,
Jefferson, and even Washington himself,^ in favor of testi-
mony derived from tables of votes in the House of Represen-
tatives, tested by measures arbitrarily selected and tried by
partisan concepts which have never been realized anywhere
in practice? That there was great uncertainty of opinion
on the part of many people and that there was considerable
movement from one side to the other will not be questioned.
These things appear under the most decided party regimes.
But the burden of proof is still upon the historian who as-
serts that there was not in the United States, during Wash-
ington's administrations, two fairly consistent and sub-
stantial groups, one indorsing and the other opposing, in
the main, the policies of the federal government.

I Madison, Writings (1867 ed.), Vol. II, p. 14. See below, pp. 62 fif.

28 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

If we remain unconvinced by Professor Libby's important
tables designed to show that there were no parties, we may
be even less moved by his declaration that the conflict over
the Constitution bore no relation to the partisan struggle
which later arose. The difficulties of proving by mathe-
matical politics the existence or non-existence of such a
relation are well-nigh insuperable. In the first place, when
we compare the map of the vote on the Constitution with a
map showing by districts the vote in the House of Represen-
tatives, we have to remember that all of the members of
the House were not elected by districts as were the members
of the state conventions which ratified the Constitution.
In the first Congress in which the votes were cast on Hamil-
ton's crucial measures, the Representatives from New Hamp-
shire, Connecticut, New Jersey, Pennsylvania, and Georgia
were elected at large. Delaware and Rhode Island had
only one Representative each. In Maryland, each voter
cast his ballot for the whole list of six Representatives, but
it was required that he should vote for one member living
in his district. Massachusetts, New York, Maryland, Vir-
ginia, North Carolina, and South Carolina elected by dis-
tricts, but the congressional district was so much larger
than the state convention district ^ of 1787-1788 that
identical measurements of the popular vote cannot be
taken.

In the second place, it must be remembered that our
local election figures for the period are painfully meagre.
The statistics of the votes in the New England towns in
the election of delegates to the state ratifying conventions
are so scanty as to be almost negligible. A few returns for
the larger towns are reported in the newspapers. The

' In New England the town was the unit of representation in the state conven-
tions which ratified the Constitution.

THE FEDERALIST-REPUBLICAN ANTAGONISM 29

records of the town meetings seem merely to show that
certain men were elected to the conventions, and do not
state by what vote or what majority.^ For New York we
have only fragmentary returns and from the Middle and
Southern states meagre newspaper reports. Our figures for
the first congressional elections seem almost as scanty.
For the election of 1800 a surprisingly large number of re-
turns are available, but they are at best unsatisfactory.

Such figures as we have, however, completely demonstrate
the impossibility of proving Professor Libby's broad thesis
that there was no substantial relation between the antago-
nism over the Constitution and the party antagonism which
followed, because these figures show a very light vote on
the Constitution as compared with the vote in the crucial
election of 1800, and thus prevent our tracing the move-
ments of electors from one side to the other. In Boston,
for example, only 760 men, out of some 2700 entitled to
vote, took the trouble to express any opinion at all on the
adoption of the Constitution, whereas over 3000 voted in
the election of 1800. That is, four times as many voted on
the Jeffersonian issue as voted on the Constitution. In
New York county, with all property qualifications removed,
2869 electors participated in the choice of delegates to the
state convention in 1788, but in the election of 1800, 5757
votes were cast in New York City alone, to say nothing of
the county, and that with the property qualifications applied.
It is readily apparent that every man who voted for the
Constitution in 1787-1788, in these cities, may have voted
for Adams, the FederaHst candidate, in 1800, and the vic-
tory have still remained with the Republicans. How can we
say, therefore, that the Federalists of 1788 went over to

' I am indebted to Mr. Spencer Miller, Jr., for examining Massachusetts records
on this point. The Connecticut records which I have investigated are no more
explicit.

30 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Jefferson or the Anti-Federalists over to Adams by merely
comparing the colors on a map? More than once New
York state has gone Democratic because the rural Repub-
licans remained away from the polls ; in other words, the
political map has been completely changed without any
appreciable change in party feeling or convictions. Politi-
cal maps must always be checked up by reference to other
sources of information, for standing alone they are often
misleading.

Certainly the proposition that the party alignments of
1788 were reversed or even indiscriminately broken in 1800
cannot be established on the few figures which Professor
Libby adduces in support of his thesis,^ A far closer analy-
sis of the election returns than he presents will have to be
made. There is, for instance, great danger in treating the
vote in such large areas as he does. This is illustrated by
the figures given below relative to the vote in the wards of
the city of New York in 1800.^ Professor Libby taking a
large area as his working unit rightly puts the city and
county of New York in the Democratic column in the elec-
tion of 1800, but the maps printed below, based on a study
of the wards and streets of New York, show that the heart
of the old city. Broad Street, Whitehall, Maiden Lane,
Pearl Street, William, State, and Wall streets, where the
wealth and culture of the city were located, were loyal to
Federalism in 1800 as in the contest over the ratification of
the Constitution. The truck gardeners, laborers, and
farmers of the outlying districts overwhelmed the men of
trade and finance at the lower end of Manhattan. If we
had such detailed figures for other areas, we might come to
the mathematical conclusion which is so much to be desired.

Another illustration of the inconclusive character of Pro-

» Above, p. 16. » Below, p. 385.

THE FEDERALIST-REPUBLICAN ANTAGONISM 31

fessor Libby's statistical methods is his treatment of the
election of 1800 in Boston. He informs us that "from the
returns of the vote by towns in the election for governor in
1800 in Massachusetts it can be seen from a town map of
the state that the Republicans carried Boston." On the
basis of the vote as represented by the map he assumes
that the wealth, talent, and social rank of the state
turned to Jefferson, and his explanation is that the alien and
sedition laws of Adams' administration produced a reaction
in the minds of the cultured classes of Boston not unlike that
produced by Shays' attack on the social order. Now as a
matter of record, Boston went Republican in 1800 by the
narrow margin of twenty-four votes and Strong, the Federal-
ist candidate for governor, polled 1531 votes ;^ that is, more
than twice the entire number cast in the town in 1787 when
the delegates to the state convention called to ratify the
federal Constitution were chosen. It is apparent, therefore,
that every Federalist of 1787 who was living in 1800 may
have cast his vote for the Federalist party for anything that
we know or can discover.

To recapitulate, we may say, therefore, that Professor
Libby's tests of partisan alignments in the first Congresses
cannot all be accepted, that his definition of a political
"party" is too strict, and that the crossing of party lines
in the legislature on many measures is such a common
matter, even where fairly definite party government is
acknowledged, as to excite no surprise at all when we find
it in the period of Washington's administrations.

In the second place, in view of our meagre figures for the
vote on the Constitution and the certain smallness of that
vote as compared with the vote in the election of 1800, we
must hold that Professor Libby's contention that the

* A. E. Morse, The Federalist Party in Massachusetts, p. 179 n.

32 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Federalist and Republican parties of the latter date were
not the lineal descendants of the Federalist and Anti-
Federalist parties of the constitutional conflict yet remains
to be proved. Indeed, we may say that it cannot be proved
by the comparative political map-making process, for the
reason (among others) that there was an enormous increase
in the vote of 1800 over that of 1787-1788, an increase
altogether out of proportion to the increase in population.
It may very well be that the Federalists who supported the
Constitution were in the main loyal to the Federalist party,
and were simply overwhelmed by a new army of the opposi-
tion raised up by the concrete measures realized under the
Constitution and by the profound agitation which stirred
America when the floods of the French Revolution were
loosened.

Finally, with reference to Professor Libby's whole con-
tention that there were no political parties between 1789
and 1800, we may say that contemporaries, no less capable
and penetrating than Jefferson, Hamilton, Washington,
Madison, and Gerry, thought there were political parties.
Men constantly spoke of the Federalist and Republican or
Anti-Federalist parties. Organizations representing these
two groups put up candidates in the important constituen-
cies and soon began to wage hot electoral battles in be-
half of their favorites. And after the elections the news-
papers recorded so many votes for the Federalist and so
many for the Republican candidates, and the mathematical
politicians set to work to figure out the strength of the
respective parties in Congress and in the state governments.
That lines were sometimes confused on measures of slight
importance or on measures which, of necessity, cut across
both capitalistic and agrarian interests there can be no
doubt, but unquestionably there was within each of the con-

THE FEDERALIST-REPUBLICAN ANTAGONISM 33

tending groups a large corps consistently loyal to its stand-
ards — a corps so large and so coherent as to deserve the
name "party." Notwithstanding the able arguments of
Professors Bassett and Libby, we are still fully justified in
asking the question: "Was there not a fundamental rela-
tion between the division over the adoption of the Consti-
tution and the later party antagonism between Federalists
and Anti-Federalists?"

CHAPTER II

THE PARTY AFFILIATIONS OF THE MEMBERS OF THE
CONVENTION

In the absence of adequate statistical material on the rela-
tion of the constitutional parties to the later political parties,
we must resort to circumstantial evidence. If there was
no relation between the party alignment of 1787-1788 and
that which followed the inauguration of the new govern-
ment, then by the law of probability, we should find the men
whose views on the adoption of the Constitution are posi-
tively known to us, distributed with a fair degree of equality
between the two parties. That is. Federalists of the consti-
tutional conflict should be fairly divided between the Federal-
ist and Republican parties, and Anti-Federalists of that
conflict likewise fairly divided. Indeed, if we should take
Professor Libby strictly at his word, we might expect to
find the former party connections entirely reversed.

The roll of distinguished men of the period whose political
history may be most easily traced is that of the Convention
which drafted the Constitution and it is peculiarly appro-
priate that we should inquire what were their party affilia-
tions during the decade which followed the establishment of
the Federal system. We shall, therefore, take them up in
alphabetical order.

Abraham Baldwin, of Georgia, a signer of the Constitu-
tion, was a Representative in the first, second, third, fourth,
and fifth Congresses and served in the United States Senate
from 1799 until his death in 1807. Baldwin voted against

PARTY AFFILIATIONS OF CONVENTION MEMBERS 35

the assumption of state debts, but it cannot be discovered
whether he voted for or against the general proposition to
fund the continental debt at face value, for there is no record
of the votes on that matter. Baldwin was in the opposition
from the beginning and remained a consistent Republican
until his death. It is not apparent, however, that he desired
to carry Jefferson's cherishment of the people doctrine ^ to
extreme lengths, for in the Philadelphia Convention he had
contended that the Senate should represent property and
that in constituting the upper house "some reference ought
to be had to the relative wealth of their constituents and to
the principles on which the senate of Massachusetts was
constituted." ^ At the time, the senate of Massachusetts
rested on property qualifications and representation was dis-
tributed among the districts on the basis of the taxable
property in each. Baldwin therefore evidently thought
that property needed a defence against "the people" in the
upper house of the new government.

Richard Bassett, of Delaware, a signer of the Constitution,
was a member of the Senate during the first Congress, 1789-
1791, and he voted for the Judiciary Act although he is
recorded against the funding bill. He was chief justice of
the court of common pleas in his state from 1793 to 1799
and in the latter year he was elected as a Federalist to the
ofl&ce of governor. In 1801 he was among the midnight
appointees selected by President Adams to fill the new cir-
cuit courts recently erected for the purpose (among other
things) of intrenching the Federalists in the judicial de-
partment of the government. Bassett was, therefore, among
the judges deposed by the Republicans when they repealed

1 Jefferson said that the party cleavage was due to the fact that the Federalists
feared and distrusted the people and Republicans cherished them. See below,
p. 417.

* Farrand, Records, Vol. I, p. 469.

36 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

the Judiciary Act in Jefferson's first administration.^ It
appears that he consistently adhered to his early Federalist
opinion until his death in 1815.^^

Gunning Bedford, of Delaware, a signer of the Constitu-
tion, was appointed to a federal district judgeship by Wash-
ington and remained on the bench until his death. Bed-
ford was a zealous Federalist. He supported Chase during
his impeachment by the Republicans and he thought it not
incompatible with his judicial office to preside at a meeting at
which a toast to Jefferson, as President of the United States,
was voted down. His biographer tells us that Bedford
"undoubtedly sympathized with Federalist principles" and
that he "disliked French doctrines and habits of dress. He
never adopted trousers, but adhered to short breeches, knee
buckles, and wore a queue with powdered hair." ^

John Blair, of Virginia, was among the signers of the
Constitution and he labored valiantly in Virginia to secure
its ratification, ser\'ing in the state convention and recording
his vote there in favor of the new plan. When Washington
was casting about for judges of the first Supreme Court
organized in 1789 he selected Blair for a position as Asso-
ciate Justice because of his eminent services as Chief Justice
of the Virginia Court of Appeals. As a member of the state
court he had agreed with his colleagues in the case of Com-
monwealth V. Caton that the tribunal "had power to declare
any resolution or act of the legislature, or either branch of
it to be unconstitutional and void." * Blair resigned his
Associate Justiceship in 1796 and retired to Virginia, where
he died in 1 800 . It seems, however, that he never surrendered

* For Bassett's protest against the repeal of the Judiciary Act which deprived
him of his office, see American Slate Papers: Miscellaneous, Vol. I, p. 340.

» W. T. Read, Life of George Read, p. 557.

• J. P. Niflds, Gunning Bedford, Jr. A pamphlet in the New York Public
Library. * Thayer, Cases in Constitutional Law, Vol. I, p. 55.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 37

his Federalist principles, for he was nominated for presiden-
tial elector on the "American" Republican party which
was bitterly opposed to Jefferson and was loyal to Washing-
ton's system.^

William Blount, of North Carolina, a signer of the Con-
stitution, was appointed by Washington to the office of
governor of the Territory South of the Ohio in 1790 and he
retained that post until 1796, when he was chosen to repre-
sent the state of Tennessee in the United States Senate.
The following year he was expelled from the Senate on the
ground that he was implicated in a treasonable plot in the
Southwest. This unhappy ending of his senatorial career
had no effect upon his position in Tennessee, for he was at
once elected president of the senate in that state, and main-
tained a high political standing until his death in 1800.
In view of Blount's record in the Republican state of Ten-
nessee, it might be surmised that he was not unacceptable
to the Republican party, but we have high authority —
The Aurora — for setting him down among "the anglo-
monarchic, aristocratic faction." ^

1 Connecticut Courant, June 16, 1800.

2 The Aurora, August 7 and 8th, 1800. Nevertheless it is stated on good author-
ity that no public man at the time in Tennessee dared to admit that he entertained
Federalist principles. American Historical Review, Vol. IV, p. 56.3. Blount's
half-brother, Willie Blount, early declared his allegiance to Jefferson in the follow-
ing curious letter preserved among Jefferson's manuscripts :

Knoxville, November 14, 1801.
Sir, Being disengaged this evening from such pursuits as generally engage my
attention, and it occurring to me that I might not be considered an intruder, since
I am one of those who admire your doings and quite willing and desirous that you
should continue to preside as President of the United States so long as you may
feel disposed to act in that way and feeling desirous that you should know merely
for my own gratification that there does exist within the limits of the United
States a man of my name, have written you this letter to which I in language of the
purest sincerity subscribe it, as

Your unfeigned, and

unalterable friend,

Willie Blount.
Jefferson Papers, 2d Series, Vol. VIII, No. 18.

38 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

David Brearley, of New Jersey, a signer of the Constitu-
tion, was appointed by Washington to the post of United
States district judge in 1789. He was thus brought into
the service of the government which he had labored to
create, but his death the following year, 1790, cut short his
career at the early age of 44.

Jacob Broom, of Delaware, a signer of the Constitution,
was a business man rather than a politician, and his biog-
rapher does not inform us concerning his later partisan
views. Like most of his colleagues in the Convention he
was willing to accept office under the new government and
he actually sought the position of collector at Wilmington.
It appears that he had to be content with the smaller office
of postmaster.^ Judging from his interests and affiUations,
Broom probably remained a loyal FederaHst, but for the
present he must be put among the unclassified.

Pierce Butler, of South CaroHna, a signer of the Constitu-
tion, served in the United States Senate from 1789 to 1796.
He voted for the funding bill and for a short time he seems
to have shared the conservative FederaHst views of his
colleague Ralph Izard, but he was opposed to the tariff and
the tonnage measures and soon drifted over into the Anti-
Federalist party.^ In other words, he remained with the
party of the Constitution until the securities in which his
Charleston friends and supporters were so deeply interested
were firmly established under Hamilton's system, and then
he refused to accord to the Northern states those commer-
cial concessions which had also been a part of the nationalist
plan of government. Butler was stanch in his defence of
slavery and he thought the United States Senate should be

> W. W. Campbell, Life and Character of Jacob Broom, Papers of the Historical
Society of Delaware, Vol. LI, p. 25.

* Professor Phillips, in the American Historical Review, Vol. XIV, p. 731 (July,
1909).

PARTY AFFILIATIONS OF CONVENTION MEMBERS 39

frankly based upon property interests.^ It does not appear
that Butler's democratic susceptibilities were offended by the
"high toned" policies of the Federalists or that Jefferson's
cherishment of the people attracted his impetuous nature.

Daniel Carroll, of Maryland, a signer of the Constitution,
was elected as a Federalist to the first Congress. He voted
once against taking over the state debts, but was induced
to change his view, probably as a result of the secret nego-
tiations over the trading of the capital for assumption. He
was one of the federal commissioners who laid out the Dis-
trict of Columbia and was instrumental in the location of
the capitol on land which he owned. ^ He died in Washing-
ton in 1796. The records readily available do not seem to
contain any definite expressions of his party opinions during
the closing days of his life.

George Clymer, of Pennsylvania, a signer of the Constitu-
tion, was a member of the House of Representatives in the
first Congress and voted in favor of assumption, supported
the protective tariff measures, and assisted the administra-
tion party during both sessions. At the expiration of his
term of service in Congress he was given a federal appoint-
ment as collector of excise, but he resigned this position
after the Whiskey Rebellion. He remained a consistent,
though not a very active. Federalist until his death in
1813.

William R. Davie, of North Carolina, did not sign the
Constitution, but he was a member of both of the North
Carolina conventions and worked to secure the ratification
of the new instrument of government. He was appointed
a federal district judge by Washington in 1790, but declined.
Adams selected him as ambassador to France in 1799, and

* Economic Interpretation, p. 192.

* Scharf , History of Western Maryland, Vol. I, p. 679 ; H. Crew, History of Wash-
ington, p. 108.

40 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

he was chosen by Jefferson in 1802 to negotiate a treaty
with the Tuscarroras. This appointment by Jefferson did
not imply, however, that Davie had any Democratic leanings.
To him the whole "jacobin creed" was vile,^ and he stood
as a Federalist candidate for Congress in 1803 only to be
defeated by WilUs Alston, a Republican.^ Shortly after
this defeat, he retired to private life and remained there
until his death in 1820. Though time may have softened
his antipathy to democratic doctrines, there can be no
doubt that he never relinquished his strong Federahst
principles.

Jonathan Dayton, of New Jersey, a signer of the Consti-
tution, was a Representative in the second, third, fourth,
and fifth Congresses and he was Speaker in the fourth and
fifth. He supported Hamilton's measures,^ but he was
very politic in the expression of his views and for a time some
of the Repubhcans thought that he was veering in the
direction of their party. However, in 1796 he wrote to
Sedgwick expressing great fear of the election of Jefferson
and his hopes for the success of Adams.* Later, he again
showed Republican tendencies and on account of his con-
ciliatory attitude received many votes from Republican
members when he was a candidate for Speaker of the
House. But shortly afterward, Jefferson counted him as
wholly lost,^ and when he was brought under a cloud in
connection with the Burr conspiracy, he was reckoned a
Federahst."

• Life and Correspondence of Iredell, Vol. II, p. 577.

« J. H. Whcclcr, Historical Sketches of North Carolina, Vol. II, pp. 188-199 ;
Pecle, Lives of Distinguished North Carolinians, pp. 59 £f.
» Hamilton Mss., August 26, 1792.

* Ibid., November 12, 1796.

•Jefferson, Works (Washington ed.), Vol. IV, p. 211.

•The Aurora for September 9, 1800, contains the following "Anglo-Federal
Compact of New Jersey " in which Dayton figures as a Federalist :

PARTY AFFILIATIONS OF CONVENTION MEMBERS 41

John Dickinson, of Delaware, a signer of the Constitution,
did not actively engage in politics after the inauguration of
the federal government, but he was no doubt in general
sympathy with Washington's administration. Neverthe-
less, he was on excellent terms with Jefferson and was re-
garded by the latter as an "orthodox advocate of the true
principles of our new government." ^ He definitely went
over to the Republican party on the withdrawal of Wash-
ington, for he hated John Adams with a cordiality that is
difficult to describe, because Adams had attacked him during
the Revolutionary period as a man afraid of his convictions
and too timid in coming to the open conflict with Great
Britain.^ It would have been impossible for Dickinson to
have associated himself with any party headed by Adams,
even if his sympathies with Jefferson's views had been merely
academic.

Oliver Ellsworth, of Connecticut, although not among the
signers of the Constitution, was a stanch defender of that
instrument and as a delegate in the Connecticut ratifying
convention he contributed powerfully to its adoption.
Ellsworth was a member of the Senate in the first Con-
gress ; he was appointed Chief Justice of the Supreme Court
by Washington in 1796 ; and was later named ambassador
to France by Adams. While in the Senate, he drafted
the Judiciary Act of 1789, voted for the funding bill, and

First. Andrew Bell, collector of customs at Amboy. Had been private sec'y
to Sir Guy Carleton at the time British evacuated New York.

Second. Judge Patterson, U. S. Sup. Ct. judge. Married Bell's sister.

Third. Jonathan Dayton, U. S. senator from N. J., promoted Bell over one
Halsey a Revolutionary patriot.

Fourth. Dayton's brother, a commissary officer.

Fifth. Dayton's nephew, a quartermaster.

Sixth. Col. Ogden, related to Dayton by marriage ; a deputy-quartermaster.

Seventh. Brother-in-law of Ogden, a medical appointee.

» Works (Washington ed.). Vol. V, p. 249.

* Liife and Works of John Adams, Vol. I, p. 183, and Vol. II, p. 410.

42 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

supported all of the economic measures of the new govern-
ment. To the last he remained a firm Federalist, despising
everything that savored of "Jacobinical Democracy."

William Few, of Georgia, a signer of the Constitution,
was a member of the state ratifying convention and gave
his support there to the new instrument of government.
He was a member of the Senate of the first Congress (1789-
1793) and voted with the rest of the Georgia delegation in
Congress against assumption. Few moved to New York
in 1799 and three years later he was appointed by Jefferson
to the office of commissioner of loans which he held until
1810. He also served in the New York state legislature
from 1802 to 1805. He may be reckoned as a consistent
Republican from the adoption of the Constitution until his
death. ^

Thomas Fitzsimons, of Pennsylvania, a signer of the Con-
stitution, was a Representative in the first, second, and third
Congresses where he warmly supported all of the fiscal,
commercial, and tariff measures advanced by Hamilton and
his group. After retiring from Congress Fitzsimons con-
tinued a strong Federalist and was active in the campaign
of 1800 against Jefferson.^

Benjamin Franklin, of Pennsylvania, a signer of the Con-
stitution, was accounted by many as lukewarm in his sup-
port of the new system, and he was put forward as an oppo-
sition candidate for member of the Pennsylvania ratifying
convention, only to be defeated. His correspondence shows,
however, that while he disapproved of some parts of the
Constitution, he thought it the best instrument that could
have been devised under the circumstances. His extreme
old age and his death in 1790 precluded his taking any part

' Autobiography, in the Magazine of American History, Vol. VII, pp. 343 ff.
» The Gazette of the United States, August to November, 1800.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 43

in the political controversies which speedily followed the
inauguration of the new government.

Elbridge Gerry, of Massachusetts, refused to sign the Con-
stitution and although not a member of the state conven-
tion, he labored with great zeal to defeat ratification. He
was a member of the House of Representatives of the first
Congress and, in common with his other security-holding
colleagues from Massachusetts, he voted in favor of the
funding bill and assumption. He vigorously denounced
Madison's proposal to discriminate against the speculative
purchasers and he supported the fiscal and commercial
policy of the new government. Nevertheless, for reasons
which it is impossible to fathom, he became a strong Anti-
Federalist in Adams' administration. It would appear,
however, that it was no extreme " cherishment of the people "
which drew him into Jefferson's party, for, in the Conven-
tion at Philadelphia, he had declared that the evils which
they had experienced flowed "from the excess of de-
mocracy," and that while he was still Republican, he "had
been taught by experience the dangers of the levelling spirit." ^
When the proposition relative to the election of United
States Senators was before the Philadelphia Convention,
Gerry "insisted that the commercial and monied interest
would be more secure in the hands of the State legislatures,
than of the people at large. The former have more sense of
character, and will be restrained by that from injustice. . . .
Besides in some States there are two Branches in the Legis-
lature, one of which is somewhat aristocratic. There wd.
therefore be so far a better chance of refinement in the
choice." ^ It is true that Gerry opposed the ratification of
the Constitution on the ground, among others, that there
was grave danger of usurpation on the part of the judiciary

I Farrand, Records, Vol. I, p. 48. > Ibid., Vol. I, p. 154. .

44 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

as contemplated by the new instrument, but his spoken
words within the secret conlEines of the convention hall may
quite justifiably be taken as representing his genuine feelings
on the subject of democracy. Without accepting the view
of his contemporary opponents, that personal ambition and
chagrin at not securing the funding of continental paper
money at par value were responsible for his Anti-Federalism,^
we may safely say that equahtarian principles did not carry
him over to Republicanism.

Nicholas Oilman, of New Hampshire, a signer of the Con-
stitution, was a Representative in the first, second, third,
and fourth Congresses and was a Senator from 1805 until
his death in 1814. Oilman voted against the assumption
bill, but it does not appear that he was opposed to Hamil-
ton's entire fiscal system, for he voted in favor of charter-
ing the first United States Bank which was extremely popular
with the security holders, among whom he was himself to be
reckoned.^ Why Oilman went over to the Republican op-
position is not clear. He was not a man given to expounding
his political principles. He was silent in the Convention
which drafted the Constitution and he was not among the
talking members of Congress.

Nathaniel Gorham, of Massachusetts, a signer of the Con-
stitution, stood as a Federalist candidate for the House of
Representatives against Gerry at the first Congressional
election, and was counted a Federalist until his death in
1796. There can be no reasonable doubt as to the stand
he would have taken had he lived until the great battle of
1800.

Alexander Hamilton, of New York, a signer of the Consti-
tution, was a member of the ratifying convention in his

' Ford, Essays on the Constitution, p. 174.
' * Economic Interpretation, p. 94.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 45

state, and did more than any other member to wring the ap-
proval of the new instrument from delegates practically
instructed by their constituents to vote against it. Hamil-
ton was appointed first Secretary of the Treasury by Wash-
ington and held that oflEice until all of the great fiscal meas-
ures associated with his name were firmly established. He
was employed by the government in 1796 to defend the con-
stitutionality of the carriage tax when it was assailed by
Virginia RepubHcans. He was called to the service of the
nation in 1798, when war with France was impending, and
in the stirring battle of 1800 he was the most trusted leader
and adviser in the FederaHst party. During his Hfe Hamil-
ton's devotion to the Federalist principles which he early
espoused never weakened, and he met his unhappy death
at the hands of a political opponent, Aaron Burr, whose
lack of skill in intrigue prevented him from becoming the
first Republican President.^

William C. Houston, of New Jersey, was prevented by ill-
health from remaining through the sessions of the Conven-
tion, and he died in 1788 before the new government was
set in motion.

William Houstoun, of Georgia, did not sign the Constitu-
tion, but he gave his support to it. Reasonable care in the
examination of the available biographical materials fails to
reveal any important particulars concerning his career or
political views after the inauguration of the new government.
If he followed the example of the other members from
Georgia, he went over to the Republican party, and this is
highly probable. Nevertheless, he must at present be
classed as doubtful.

Jared Ingersoll, of Pennsylvania, a signer of the Consti-
tution, apparently did not seek any public office after his

> Below, p. 408.

46 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

services in the Convention. He was early nominated to
the post of United States district attorney, but declined to
serve. Adams offered him a federal judgeship in 1801, but
he refused it. He was selected as the Federalist candidate
for Vice-President in 1812, and no doubt he remained a firm
Federalist until his death. ^

Daniel of St. Thomas Jenifer, a signer of the Constitution,
from Maryland, died in 1790, and therefore took no part in
the political controversies which began to rage early in
Washington's administration.

William Samuel Johnson, of Connecticut, a signer of the
Constitution, was also a member of the Connecticut con-
vention and there voted in favor of ratifying the Constitu-
tion. He was elected to the first Senate of the United
States and served from 1789 to 1791, giving his powerful
support to the funding bill, the judiciary act, and the other
measures which were designed to afford stable foundations
for the new system. After his term of service in the Senate,
Johnson devoted himself to his labors as President of Colum-
bia College, until his resignation in 1800. Like all the
stalwart Federalists of his native state, Johnson remained
faithful to his party until his death in 1819. After his re-
tirement from Columbia College he seems to have taken
little or no part in political discussions,^ but Dr. Dwight,
of Yale, said of him in 1815 that he might be considered
"as the representative of his contemporaries of a former
age, whom time has spared for the purpose of pointing out
to their children the true policy of this state." ^ If Johnson
had betrayed in public discourse or private conversation any
sympathy with the party of Jefferson, he would hardly have
received this praise from the valiant warrior against atheism.^

> H. Binney, Leaders of the Old Bar of Philadelphia, p. 86.

' Bcardsley, Life and Times of Johnson, p. 165.

» Ibid., 167. ♦ See below, p. 365.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 47

Rufus King, of Massachusetts, a signer of the Constitu-
tion, moved to New York in 1788 and was at once elected
to the United States Senate, where he served from 1789 to
1796. In the Senate he was a thoroughgoing and powerful
supporter of Hamilton's fiscal and commercial measures.
At the expiration of his term. King was appointed minister
to Great Britain and represented the United States there
until 1803. He was the Federalist candidate for Vice-
President in 1804 ; he ran for governor of New York on
the Federahst ticket in 1815 ; and he had the honor of being
the last candidate ever nominated for President of the
United States by the FederaUsts, in 1816. Although unable
to secure an office by popular vote. King was elected as a
Federahst to the Senate in 1813 and remained there until
1825. In that year he was sent for a second time to the
Court of St. James as minister of the United States, but he
held this post for only one year. He died in 1827.

John Langdon, of New Hampshire, a signer of the Con-
stitution, was a member of the state ratifying convention
and it was largely by his skilful engineering that the conven-
tion was adjourned when it was found that a majority were
instructed to vote in the negative, and reassembled when
enough converts to the Federahst party had been secured.
Langdon was elected to the first Senate and he took an
active part in the management of Hamilton's fiscal meas-
ures in Congress. He remained loyal to the Federalist
group until 1794 when he broke with Washington's pohcies.
The following year he opposed the Jay treaty and for this
action the commercial town of Portsmouth voted him thanks
and gave him a pubhc dinner. From that time forward he
was a strong opponent of the administration ; he attacked
Adams with extraordinary vehemence ; and at length he
attached himself to Jefferson's party, believing that it was

48 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

time for all men of "property and influence" ^ to follow the
leadership of the great Virginian. His biographer says of
him : "He courted popularity with the zeal of a lover and
the constancy of a martyr." ^

John Lansing, of New York, left the Philadelphia Conven-
tion before the Constitution was finished, because he con-
tended that the delegates had exceeded their powers in
casting aside the Articles of Confederation and drafting a
national system.^ He was a member of the New York
convention and there worked and voted against the ratifica-
tion of the Constitution. Lansing was appointed justice of
the New York supreme court in 1790, and eight years later
was elevated to the post of chief justice, which he occupied
until 1814 when he became a regent of the University of
New York. He remained a consistent Anti-Federalist until
the end of his days, but he was not an active politician, and
he declined to become a candidate for governor in 1804
when the Anti-Federalists unanimously nominated him.

William Livingston, of New Jersey, a signer of the Con-
stitution, was offered a post as superintendent of federal
buildings as soon as the new government was established,
but he declined the appointment. He was shortly after-
ward asked by Washington to go to Holland as the minister
of the United States, but this he likewise declined. He
died in 1790.

James McClurg, of Virginia, was an eminent physician at
Richmond, and does not seem to have taken a prominent
part in national politics. Washington thought so highly of
his abilities that he might have appointed him Secretary of

' The Aurora, November 14, 1800. Langdon wrote, on October 18, 1800,
"I am greatly rejoiced to see gentlemen of property and influence coming forward
at this eventful moment."

' BatchoUor, Slate Papers of New Hampshire, Vol. XXI, pp. 806 ff.

* Farrand, Records, Vol. Ill, p. 244.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 49

State on Jefferson's resignation, but was deterred by the
rumor that he was a speculator.^ McClurg was elected a
director of the Bank of the United States in 1791, and all
of his afl5.1iations were Federalist in character. But without
conclusive documentary evidence as to his later political
views, McClurg must remain for the present unclassified.

James McHenry, of Maryland, one of the signers of the
Constitution, was also a member of the convention of his
state and voted in favor of ratification. He early expressed
his willingness to accept office under the new government.^
He served as Secretary of War, under Washington for a
time, and also for a short period under Adams. McHenry
was active in politics, particularly during the campaign of
1800 in which he supported the Federalist cause with great
ardor. The defeat of his party in no way diminished his
devotion to Federalist principles and he remained loyal to
them until his death in 1816. To the end, he hoped that
enough Federalists might be found to protect the Constitu-
tion against radical changes and to restore it to its original
form, and he never ceased to lament the low estate into
which the nation had fallen through the triumph of "demo-
cratical" doctrines. To Lafayette, he wrote in 1803 in a
tone akin to despair: "Were you to come among us, you
would find yourself in many points of view, as it were, in a
new world. Most of your old friends in private life, friends
tremblingly alive to whatever is likely to affect their popu-

> Jefferson, Works (Washington ed.), Vol. IX, p. 168.

* "I asked appointments for some honest but poor federals of this place and the
President has been very attentive to my recommendations. I asked nothing for
myself because in fact I am very easy in my circumstances. Still, however, I am
not wholly lost to ambition and would have no objection to a situation where I
might indulge and improve at the same time my literary propensities with perhaps
some advantage to the public. Will you therefore be good enough to feel (if a
resident or even charg6 des affaires is to be appointed to London or France) whether
the President has thought of me or would in such a case nominate me." Hamil-
ton Mss., October 27, 1789.

50 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

larity. The people too changed, that is because more
democratical. Great and lesser demagogues in every state
and district and the prejudices and violence of party, leav-
ing httle or no room for moderation or social intercourse
between men of opposite politics. . . . These are no doubt
evils in themselves, and what is worse may lead to still
greater. We cannot tell what further changes such demo-
cratical opinions may produce in the public mind, in the
government itself. Wlien the people are made to believe
that they are everything, and have a right to have every-
thing fashioned to their own way of thinking, they are in a
sure road of alternately ruling their demagogues and being
ruled by them, and the fundamental laws and institutions
of the state disregarded or trampled upon as they stand
opposed to the passions or interests of their leaders. Such
has generally been the consequences of flattering the multi-
tude in republics, for in republics any deviation in the
people from their prescribed rights and the government
from the free exercise of its authorities leads rapidly to
democracy, in other words confusion and licentiousness.
As yet, however, such consequences are more feared than
felt ; and feared only by the most reflecting part of the
community, those in power excepted, who act as if they
thought they could manage the multitude according to their
views of public interest. . . . With respect to myself I
would not say that I am an unconcerned spectator, or in-
different to all that passes. Having an interest at stake,
loving real liberty, and wishing for its maintenance, I can-
not without regret look upon any conduct in rulers or the
people which tends to endanger and finally destroy it. In
my eyes, despotism of the multitude is the most terrible of
tyrannies." ^

* Steiner, Life and Correspondence of McHenry, p. 527.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 51

James Madison, of Virginia, a signer of the Constitution,
labored valiantly in the Virginia convention for its ratifica-
tion. He would have been elected to the first United States
Senate had it not been for the Anti-FederaUst opposition to
him in the state legislature. Under the circumstances he
was compelled to be content with an election to the House
of Representatives. As is well known, he turned very early
against Hamilton and his policies ; he fought for a discrimi-
nation between the original holders of securities and the
speculative purchasers ; he opposed. the assumption of state
debts ; and he soon became an avowed partisan of Jefferson.
Why Madison made this radical change has long been a
subject of conjecture among historians, but no universally
accepted answer to the enigma has been found. Many
have ascribed it to his personal ambitions and his discovery
that there was no hope for him in the FederaHst party, in
view of the Anti-Federalism of Virginia. Others ascribe it
to his antipathy to the fiscal measures of the Secretary of
the Treasury, and this seems more plausible, for Madison
held no securities and was not engaged in the private financial
operations which were extensively connected with Federal-
ism. Certain it is that it was not difference in fundamental
principles of government which carried Madison into opposi-
tion to Hamilton, for no member of the Philadelphia con-
vention more earnestly beheved in a thoroughgoing economic
interpretation of politics, more profoundly distrusted ma-
jority rule, more assiduously sought for some devices to
check the assaults of the masses upon the rights of property,
or more anxiously feared the great experiment of universal
manhood suffrage.^

The most plausible explanation of Madison's change would
seem to be the following. During the constitutional struggle

1 Economic Interpretation, pp. 25, 15fr-158.

52 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

he displayed as much anxiety about providing adequate
checks on the state legislatures which had been assaulting
property rights as about the positive achievements of the
national government. When the federal system was in-
augurated he discovered that a more active capitalistic
policy than he had contemplated was determined upon,
and that policy he found to be particularly offensive to his
agrarian state which had barely ratified the Constitution.
In other words, it was the capitalistic views of the Federal-
ists, not their "fear of the people," that drove him into
the opposition. It is an interesting commentary on the
quality of Jefferson's democracy that he chose Madison as
his successor.

Alexander Martin, of North Carolina, left the Convention
in August and was not among the signers of the Constitu-
tion. Martin took little part in the proceedings of the Con-
vention and one of his colleagues, Hugh Williamson, sug-
gested that he had so exhausted his fund of political wisdom
as governor of the state "that time must be required to
enable him again to exert his abilities ^.o the advantage of
the nation." ^ Martin seems to have been an adroit poli-
tician, for he was elected governor of his state in 1792 by a
Federalist legislature but with the support of both parties.^
The following year he was elected to the Senate of the
United States as a moderate Republican, although he was
charged with being aristocratic in his sympathies and known
to have been in harmony with Davie, Johnston, Spaight,
and other advocates of a reformed federal system.^ He
may be set down therefore as a conservative Republican
by force of circumstances.

Luther Martin, of Maryland, refused to sign the Constitu-

• Farrand, Records, Vol. Ill, p. 55.

« J. W. Moore, History of North Carolina, Vol. I, p. 408.

* Ibid., p. 411.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 53

tion, and was one of the most truculent opponents of Federal-
ism in his state. He was a member of the state convention
and labored in vain to defeat ratification. He was an out-
spoken champion of the agrarian and debtor interests with
which he had a practical as well as a theoretical sympathy,
for his own fortunes were usually at a low ebb. He was a
loyal Republican until his death, but his loyalty was to his
benefactor, Burr, not to Jefferson.

George Mason, of Virginia, remained in the Convention
until the completion of the Constitution, but he refused to
sign the instrument. He was also a member of the Virginia
convention and there labored to defeat the ratification of the
Constitution. On account of his opposition to the new
system he was elected to the first Senate by the Virginia
legislature which was practically dominated by Anti-
Federalists, but he decHned to serve and retired to his
estate where he died in 1792. He took no active part
in the great political controversies that began early in
Washington's first administration, but it is known that
he was opposed to the fiscal poHcy of the government, for
he said to Jefferson a short time before his death that
Hamilton had done the country more harm than all the
fleets and armies of Great Britain. This last recorded con-
versation with Mason shows conclusively that the opponent
of the Constitution in 1787 and 1788 must be set down as
a Republican in 1792.^

John Mercer, of Maryland, like his colleague Luther
Martin, refused to sign the Constitution and did his best
to prevent ratification by his state. He was a Representa-
tive in the second and third Congresses and was consistently
with the opposition. He was counted among the giants of
the RepubUcan party in his state and was chosen governor

» Rowland, George Mason, Vol. II, p. 364.

54 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

in 1801. Like Luther Martin, he was a champion of the
agrarian and the debtor, and in the Philadelphia Convention,
he declared that he was "a friend to paper money," adding
that "it was impolitic also to excite the opposition of all
those who were friends to paper money. The people of
property would be sure to be on the side of the plan, and it
was impolitic to purchase their further attachment with the
loss of the opposite class of citizens." ^ He seems to have
been moved by his sympathy with the paper-money party
rather than by any theoretical "cherishment of the people,"
for in the Convention he had opposed the popular election
even of members of the House of Representatives, saying,
"the people cannot know and judge of the characters of
Candidates. The worst possible choice will be made." ^

Thomas Mifflin, of Pennsylvania, a signer of the Consti-
tution, was governor of his state for most of the time between
the drafting of the Constitution and his death in 1800. On
account of his patriotic services during the Revolution he
seems to have been able to unite the suffrages of both parties.
Nevertheless, it was well known that his leanings were toward
the conservative or Federalist party. He was president of
the convention which drafted the more conservative consti-
tution for the state in 1790 and was elected first governor
under that instrument. He supported the administration
during the whiskey rebelhon, but not with the zeal which
the more ardent Federalists desired. Both parties agreed
on him for governor in 1796,^ but there is no doubt of his
sympathy with the important pohcies of Adams' adminis-
tration.*

Gouverneur Morris, of Pennsylvania, a signer of the Con-
stitution, was a tower of strength for the FederaHst party

1 Farrand, Records, Vol. II, p. 309. ' Ibid., Vol. II, p. 205.

•The Aurora, October 11, 1796.

* Pennsylvania Archives, 1785-1717, p. 403.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 55

until his death in 1816.^ He was appointed commissioner
to England in 1789, and minister to France in 1792. He was
elected as a Federalist Senator from New York in 1800 and
served for three years, waging war on the Republicans at
every point. To him all articles in the "Jacobinical creed"
were odious. He had been in France when the king was
executed and the first republic set up, and he thought he
had seen with his own eyes the realization of the Utopian
vision which the Republicans had beheld from afar.

Robert Morris, of Pennsylvania, a signer of the Constitu-
tion, was a member of the first Senate of the United States
and was the chief legislative manager for Hamilton in Con-
gress.^ After a short service, he retired to private life and
labored hard to untangle his private affairs, but in vain, for,
in spite of his heroic efforts, he was unable to escape the
debtor's cell.' After he left the Senate, Morris did not take
an active part in politics, but there can be no doubt that
his sympathies lay with the Federalist party. Notwith-
standing this fact, Jefferson would have called him into his
cabinet had it not been for the discredit into which Morris
had fallen through his financial misfortunes.

William Paterson, of New Jersey, a signer of the Consti-
tution, was a member of the state convention and voted
there in favor of ratification. He was elected to the first
Senate and voted in favor of the funding bill. He resigned,
however, in 1790 and was the following year elected gov-
ernor of his state. In 1793 he was appointed a Justice of the
Supreme Court of the United States by Washington and
held that high post until his death in 1806. Little is known
of his personal views on the party controversies that went

1 Roosevelt, Gouverneur Morris, Chaps. XII and XIII.
« See below, p. 186,

' One of the last measures of the Federalist party was a bankruptcy law under
which Morris was released.

66 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

on about him, and he may have felt himself precluded by
his judicial position from taking too active a part in them.
Nevertheless, his sympathies were with the Federahsts until
the end, and he was set down by the Republicans as a mem-
ber of the New Jersey Federalist junto in 1800.^ All of
his opinions while on the bench were acceptable to the
FederaUst party. He took the Federalist view in the case
of the United States vs. Hylton ^ in which the carriage tax
was upheld. Mr. Horace Davis has argued with no little
ingenuity to show that Paterson did not accept the Federalist
doctrine of judicial control over acts of Congress,^ but his
argument must fall to the ground when it is known that
there is a long federal opinion by Paterson in which he
distinctly states that it is one of the functions of the Su-
preme Court to hold null and void acts of Congress which
transgress the limits of the Constitution.^ If this is not
sufficient evidence on the point, the fact that Paterson was
a member of the Court which decided the celebrated case of
Marbury v. Madison may be taken as conclusive.

William Pierce, of Georgia, left the Convention long
before the Constitution was completed and was not among
the signers. It appears, however, that he favored the rati-
fication of the instrument.^ He took no part in the actual
estabUshment of the new government, for he died in 1789.

Charles Pinckney, of South Carolina, signed the Con-
stitution and gave his support to the ratification of the in-
strument in his state. He failed to receive any high
appointment under the new government and soon became
disgruntled with the course of events at the national capital.
A very careful and judicious scholar has said of Pinckney :

1 The Aurora. September 9, 1800. ' 3 Dallas, 171.

» American Political Science Review, November, 1913.

« Paterson Mss. (Bancroft Transcripts) New York Public Library.

» Farrand, Records, Vol. Ill, p. 100.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 57

"He was, however, a plunger in business affairs and a spoils-
man in party politics ; and according to tradition he was dis-
honest in the conduct of trust estates committed to his
charge. He launched into Republican leadership partly
from a dislike of Adams, but more largely it may be con-
jectured from a desire for a conspicuous career. In 1795
the South Carolina Republicans were a leaderless party
and Charles Pinckney was a talented politician without a
following and with no principles in particular. He em-
braced the opportunity, was elected governor and senator,
and in 1800 swung his state to Jefferson and deposed his
enemy, Adams, from the presidency." ^ Certainly it can-
not be said that "cherishment of the people" was the prin-
ciple which actuated Charles Pinckney in his political opera-
tions, for in the Convention which drafted the Constitution
he advocated a property qualification of $100,000 for Presi-
dent, $50,000 for Supreme Court judges, and a proportional
sum for members of Congress.^ Moreover he thought the
election of members of the House of Representatives by
popular vote was theoretical nonsense which would bring
our councils into contempt.^ Pinckney remained a consist-
ent Jeffersonian until his death in 1824.

Charles Coatesworth Pinckney, of South Carolina, unlike
his young and impetuous cousin, Charles, was faithful to the
Federalist cause until the end. He signed the Constitution
and worked for its ratification by the convention of his
state ; but he does not seem to have been such a skilled
politician or such a shrewd manipulator as his cousin.*
Professor Phillips informs us that Charles Coatesworth
Pinckney was a dignitary and ornament of the Federalist

» Professor U. B. Phillips, American Historical Review, Vol. XIV, p. 739.]

2 J'arrand, Records, Vol. II, p. 248.

' Madison Mss., Library of Congress, March 28, 1788.

♦ Professor U. B. Phillips, American Historical Review, Vol. XIV, p. 738.

58 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

party in South Carolina rather than a working member.
This does not imply, however, that he was by any means
an indifferent spectator during the stirring events which
followed the establishment of the government, or that his
advice and help were not constantly sought by men high
in the councils of the Federahst party. When McHenry
asked his opinion in the summer of 1800 about poHtical
affairs, he showed his deep interest in maintaining the
original principles of his party and in avoiding any Jacobini-
cal taint. ''If the FederaHsts will act with decision, energy,
and union," he said, "I have no doubt but they will gain
a complete victory at the ensuing election over the Jacobini-
cal party, notwithstanding the untoward result of the elec-
tion at New York and the tergiversation of Mr. A . Can

the accounts I have heard be possibly true that he is en-
deavoring to coalesce with Jefferson, and that he stigma-
tizes the Federalists with the odious appellation of a British
party, and that he declares that he and Jefferson will con-
vince the federal junto of their joint power ? With regard to
the conduct of the Southern states at the coming election,
I think they are bound fairly and candidly to act up to their
agreement entered into by the federal party at Philadelphia,
without the Eastern states should be convinced of Mr. A's
abandonment of federal principles, his attempt to form a
party with Jefferson and his unfitness to be President, and
on these accounts or some of them should consent to sub-
stitute another candidate in his stead. This event I do
not think impossible and his conduct and the critical situa-
tion of our country may require it. . . . Marshall with
reluctance accepts, but you may rely on his federalism and
be certain that he will not unite with Jefferson and the
Jacobins." ^ It is perfectly clear from this letter that

> Steiner. The Life and Correspondence of James McHenry, p. 459.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 59

Pinckney was willing to support Adams in 1800, only on
condition that the latter should remain true to Federalist
principles and avoid all signs of compromise with the Jeffer-
sonian Democracy. He was, therefore, a Federalist from
conviction, not for convenience.

General Pinckney so enjoyed the confidence of his party
that he was named as the candidate for Vice-President in
1800 and he then received sixty-four electoral votes as
against seventy-three cast for Burr. In 1804 he led the
Federalists in a forlorn hope as candidate for President
against Jefferson and polled fourteen out of 176 electoral
votes. Four years later he again led the Federalists to
defeat, this time against Madison, and received fifty -four
electoral votes. During this last campaign, he was sup-
ported as a genuine and consistent Federalist battling for
the Constitution against Madison "the trimmer." " General
Pinckney," wrote a Charleston pamphleteer in 1808, " assisted
at the formation of our glorious Constitution and afterward
employed all of his energies, talents, and influence, with
effect, in recommending it to the people of this state for their
adoption in our general convention. And he has from the
adoption of that instrument down to the present tem-
pestuous times been its champion and defender and a warm
and unceasing advocate for handing it down to posterity
unaltered by those mischievous and judiciary-hating dema-
gogues who prefer untried theory to experience and prac-
tice. He was at the time of the formation of the Constitu-
tion a distinguished and zealous Federal Republican. He
is still a Federal Republican. Consequently he is no trim-
mer [like James Madison]." ^

Edmund Randolph, of Virginia, did not sign the Consti-

^A Letter on the Approaching Election (1808). By a native of Charleston.
Duane Collection, Library of Congress, Vol. 107, No. 4.

60 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

tution, but he was a member of the Virginia convention
and voted there in favor of its ratification. He was ap-
pointed Attorney-General by Washington in 1789 and held
that post until 1794 when he was transferred to the office
of Secretary of State on Jefferson's resignation. The fol-
lowing year he was asked to withdraw on account of serious
charges of corruption made against him by the French
minister in despatches to the French government, which were
intercepted. From this time forward, his sympathies were
with the Anti-Federalist party although he can hardly be
said to have joined the democratic faction. On the con-
trary, he assailed the democratic societies with great vigor.-^
In this, however, there was no inconsistency, because Ran-
dolph had taken the position in the Convention that the
evils under which the United States had labored were trace-
able to the "turbulence and follies of democracy."^ Not
even Hamilton had taken a firmer position on the question
of providing an adequate check in the Senate against the
"demagogues of the popular branch." ^ From his with-
drawal to private life in 1795 until his death in 1813, Ran-
dolph took no very active part in politics. His feelings
toward Jefferson were mixed, to put it mildly ; and al-
though by fortune's chance he was thrown into the Repub-
lican party, he felt at home there because so many leaders
in that group entertained similar views as to "the cherish-
ment of the people" doctrine.

George Read, of Delaware, a signer of the Constitution,
was elected to the Senate of the United States in 1789 and
voted for the fiscal measures of the Treasury. He left the
Senate in 1793 and served as chief justice of the state of
Delaware until his death in 1798. In the Senate, he was

* M. Conway, Edmund Randolph, p. 361.

» Farrand, Records, Vol. I, p. 51. « Ibid., Vol. I, p. 218.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 61

regarded by the administration party as a consistent Federal-
ist and his withdrawal was viewed as a decided loss by his
colleagues of that group. ^ He supported John Adams for
Vice-President in 1792 and remained a firm Federalist until
his death .^

John Rutledge, of South Carolina, a signer of the Consti-
tution, was appointed by Washington to the office of Asso-
ciate Justice of the Supreme Court of the United States in
1789 and he held that place two years, resigning to accept
the chief justiceship of the supreme court of his state. In
1795, Rutledge was nominated by Washington Chief Jus-
tice of the federal Supreme Court, but the Senate refused
to confirm the nomination on account of the fact that he
had assailed the Jay treaty with great vehemence, describ-
ing it as "prostituting the dearest rights of freemen and
laying them at the feet of royalty." ^ A mental disorder
prevented his taking a further active part in politics, but we
may be sure that he would not have allowed his opposition
to the treaty to carry him into the extreme democratic
group, for he had been one of the stoutest advocates of
property qualifications and the rights of property in the
Convention.* His son, John Rutledge, Jr., although elected
to Congress uncommitted in 1796, joined the Federalist
party a short time after taking his seat.^ The elder Rut-
ledge died in 1800.

Roger Sherman, of Connecticut, a signer of the Constitu-
tion, was a Representative from his state in the first Con-
gress of the United States, and there gave his warm support
to the fiscal measures of the new government. On the ex-

1 W. T. Read, Life of George Read, pp. 531, 532, 638.

*/Md., pp. 542, 556, 557, 565, 566.

' American Historical Review, Vol. XIV, p. 736.

* Economic Interpretation, p. 213.

' American Historical Review, Vol. XIV, p. 736.

62 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

piration of his term he was elevated to the United States
Senate where he remained until his death in 1793. There
can be no doubt about the firm Federalism of Sherman.

Richard Spaight, of North Carolina, a signer of the Con-
stitution, was a stanch Federalist during Washington's ad-
ministration, but went over to the Republicans in the elec-
tion of John Adams. ^ Spaight had opposed the doctrine
of judicial control in the Convention,^ but it does not
appear that he was at all in sympathy with the democratic
notions associated with Jefferson's name.^ Spaight was
elected as a Republican to the fifth and sixth Congresses.
He was killed in 1802 in a duel which grew out of a political
quarrel with his Federalist opponent,*

Caleb Strong, of Massachusetts, did not sign the Consti-
tution, but he was a member of the state convention and
voted in favor of ratification. He was a member of the
Senate of the United States from 1789 to 1796, and there
he supported the fiscal measures of the Treasury Depart-
ment. Strong was a Federalist presidential elector in 1809.
He served as the Federalist governor of Massachusetts in
1800-1807 and again in 1812-1816. He remained loyal to
that party until his death in 1819.

George Washington, of Virginia, a signer of the Constitu-
tion, although not a member of the state convention,
materially aided by his extensive correspondence in the work
of ratification. He was elected first President under the Con-
stitution and did more than any one else to reconcile a por-
tion of the opposition to the new order. Although he sought
to smooth away the roughness of the party antagonism
by a conciliatory policy, Washington gave his unqualified

• J. W. Moore, History of North Carolina, Vol. I, pp. 436-437.

* Beard, The Supreme Court and the Constitution, p. 63,
' Moore, op. cit.. Vol. I, pp. 374, 377.

*Ibid., Vol. I, p. 434.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 63

support to every one of the fiscal measures of the new gov-
ernment which were the real source of renewed party strife.
Pierce Butler declared that Hamilton bullied others into
supporting his policies but won Washington by servility/
but this view does not comport with what we know of
Washington's character and views. During the struggle
over ratification he wrote that it was useless to adopt the
Constitution unless provision was made for the faithful
discharge of the public debt. He frankly said that they
might as well remain under the Articles of Confederation as
to accept an instrument that would not permit the govern-
ment to collect adequate revenues.^ Inasmuch as Wash-
ington entertained such notions as to the purpose of the
Constitution, it could hardly have been necessary for Hamil-
ton to "win him by servility." Furthermore, we know
that Washington, notwithstanding the great reliance he
placed in Hamilton's policies and political skill, worked over
the Secretary's plans with care and caution and approved
them only after the exercise of his independent judgment.
Although he shared Jefferson's dread of the populace of
great cities,^ and seems to have approved privately Jeffer-
son's leanings toward an agricultural rather than an indus-
trial civilization, Washington never faltered in his support
of Federalist fiscal and commercial policies. The agitation
carried on by the Democratic societies was odious to him,*
and toward the closing days of his last term he avowed his
opinion that no one should be appointed to federal office,
who was opposed to the principles of the administration.^
There is absolutely no doubt that Washington's sympathies

1 Jefferson Papers (Library of Congress Mss.), 2d Series, Vol. IV, No. 77.

2 Documentary History of the Constitution, Vol. IV, p. 40.
' Writings (Sparks ed.). Vol. X, p. 179.

* Ibid., Vol. X, p. 429.

' Writings (Ford ed.), Vol. XII, p. 107.

64 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

were with the party that gathered around Hamilton rather
than with the RepubHcan party.

Of course, it has been said by many historians that
Washington was non-partisan and tried to conciHate all
factions by holding an even balance. This is a generaliza-
tion with which we may not quarrel with great profit. If
it is taken to mean that Washington sought to conciliate
all sections of the country and to draw to the support of
the government all friends of the Constitution, it may be
accepted; but such a statement is superficial, to say the
least. If it is taken to mean, however, that Washington,
in forming the new administration, appointed men with-
out regard to the position which they had taken in the
contest over the ratification of the Constitution and placed
in high offices opponents and supporters indiscriminately,
it is not true in fact. If it means also that Washington,
after his administration was well started and the con-
troversies over his policies had arisen, continued to select
federal officers without regard to their attitude toward
the practical workings of the new system, it is equally
untrue.

As is pointed out below, every one of the high officials
of the new government, whom Washington selected, was
a supporter of the Constitution in the Philadelphia Con-
vention, or in a state convention, or both, or at all events
a known advocate of the adoption of that instrument. The
apparent exception to this rule is the case of Jefferson who
was appointed to the office of Secretary of State. It has
been said by many writers that Washington deliberately
selected Jefferson because he wanted a well-balanced ad-
ministration in which the divergent views of Hamilton and
Jefferson might be represented. In this connection two
facts should be noted. The first is that, although Jefferson

PARTY AFFILIATIONS OF CONVENTION MEMBERS 65

was out of the country during the period in which the Con-
stitution was made and ratified and the new administration
instituted, he was known to have been, in spite of some
misgivings, in favor of its ratification by enough states to
set it into operation — the other states to withhold their
approval until the bill of rights amendments could be at-
tached. The second fact is that Jefferson's views on the
fiscal policies which were to be advanced by Hamilton
could not have been known when he was appointed Secre-
tary of State, for they were not yet formulated. Moreover,
Jefferson confessed his ignorance of financial questions and
was far from being an avowed opponent of all of Hamilton's
fiscal policies in the beginning.^ To say, therefore, that
Hamilton and Jefferson entertained in 1789 clearly diver-
gent views which Washington, for non-partisan reasons,
desired to have represented in his administration is with-
out foundation.

We may readily admit with Professor Libby ^ that Wash-
ington's desire to keep both Jefferson and Hamilton after
their serious differences had arisen was an evidence of his
desire to "mollify and soften the harshness of factional
animosity," but that of course does not mean that Wash-
ington took a middle ground between his belligerent Secre-
taries. In reality, he did not at any time assume a "non-
partisan" position with regard to the clashing views of
Jefferson and Hamilton. On the contrary he indorsed
practically every one of the latter's administrative policies,'

1 J. C. Hamilton, Life of Alexander Hamilton, Vol. IV, p. 447.

* North Dakota Quarterly Journal, Vol. II, p. 219.

• Some contemporaries were wont to regard Washington as an old man duped
by Hamilton's flattery and therefore willing to accept the Treasury measures with-
out careful examination. In this view Washington was to be exempted from the
party attacks made upon the administration. (See Pierce Butler's letter, Jef-
ferson Mss., 2d Series, Vol. IV, No. 77, cited above, p. 63.) The fact is that
Washington assumed full responsibility for the measures of hia administration.

66 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

defended him against the attacks of his enemies, and in the
end retained him in office while allowing the disgruntled
Secretary of State to retire to the seclusion of his Virginia
estate. Therefore, it may be said that as to every one of
the great economic measures which the Constitution was
designed to effectuate and which were necessary to the es-
tablishment of the new system, Washington was never
non-partisan — in any sense in which that vague phrase
may be reasonably construed.

Actions speak louder than words, but Washington has
not left us without guidance as to his formulated views on
this question of non-partisanship. Whatever generous
conciliatory opinions he may have entertained at the out-
set of his first administration, he learned by experience
the danger of bringing into public office those belonging
to the opposition faction. In a letter written to Timothy
Pickering on September 25, 1795, he said: "I shall not,
whilst I have the honor to administer the government,
bring any man into any office of consequence knowingly
whose political tenets are adverse to the measures which
the general government are pursuing ; for this, in my
opinion, would be a sort of political suicide." ^ In this
declaration, two fundamental principles are implied. One
is that the establishment of certain general doctrines of
law does not make a government, but that the men who
embody those principles in their personal views and con-
He flatly declared to Jefferson, in speaking of the opposition, that "in condemning
the administration of government, they condemned him, for if they thought there
were measures pursued contrary to his sentiments, they must conceive him too
careless to attend to them, or too stupid to understand them." Washington added
that "though, indeed, he had signed many acts which he did not approve in all their
parts, yet he never put his name to one which he did not think, on the whole, was
eligible. That as to the Bank, which had been an act of so much complaint, until
there was some infallible criterion of reason, a difference of opinion must be toler-
ated." Jefferson, Works (Washington ed.), Vol. IX, p. 117.

» Writings (Ford ed.). Vol. XII, p. 107.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 67

duct can alone make the law living and effective. The
second is that Washington must have recognized the exist-
ence of a fairly definite body of opposition to the measures
of the federal government — whether those who have a
strict regard for the niceties of language would call it a
party or not.^

If it still be contended that Washington took no partisan
position during his administration (and with what justice
the reader may decide for himself), it cannot be denied that
when the admitted division into Federalists and Repub-
licans came, just before the election of Jefferson, the sym-
pathies of the former President were all on the side of the
party of Hamilton. When he heard of Marshall's election
to Congress in the spring of 1799 he congratulated the vic-
torious candidate and said that he received the news "with
infinite pleasure." His only regret was that the majority
had not been greater, but he expressed the hope that as
the tide was turning it would soon run strong in Marshall's
favor.^ On the same day, he wrote to Bushrod Washing-
ton : " The elections of Generals Lee and Marshall are
grateful to my feelings. I wish, however, both of them
had been elected by greater majorities ; but they are elected,
and that alone is pleasing. As the tide is turned, I hope it
will come in with a full flow ; but this will not happen, if
there is any relaxation on the part of the Federalists. We
are sure that there will be none on the part of the Repub-
licans, as they have very erroneously called themselves. . . .
In point of abilities, I think the superiority [in Congress]
will be greatly on the side of Federalism." ^

Not only did Washington rejoice in Federalist victories.
He could not bring himself to regard with any esteem the

' The enrolled voter in a party under the law of New York merely binds himself
to support the designated party "generally."

» Writings (Ford ed.), Vol. XIV, p. 180. « Ibid., p. 181, note.

68 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

leaders of the Republican faction. In his opinion they
had attacked with unwarranted rancor and virulence the
policy of the administration with reference to France,
they had tortured every act, by unnatural construction,
into a design to violate the Constitution, introduce mon-
archy, and establish an aristocracy ; and they had sought
to influence the public mind "with art and sophistry, which
regard neither truth nor decency ; attacking every character
without respect to persons, who happens to differ from
themselves in politics." ^ In July, 1799, he exclaimed :
"Let that [Republican] party set up a broomstick and call
it a true son of liberty, — a democrat, — or give it any
other epithet that will suit their purpose, and it will com-
mand their votes in toto. Will not the Federalists meet,
or rather defend their cause, on the opposite ground?
Surely they must, or they will discover a want of policy
indicative of weakness and pregnant of mischief ; which
cannot be admitted." ^ In response to Governor Trum-
bull's request that he become the Federalist candidate for
President in 1800, Washington refused, saying : " I am
thoroughly convinced I should not draw a single vote from
the anti-Federal side, and, of course, should stand upon
no other ground than any other Federal character well
supported." ^

There can be no doubt also that Washington shared the
alarm of the Federalists generally at the growing strength
of the Republican party. In January, 1799, he wrote a
confidential letter to Patrick Henry,* which, on account

> Writinos (Ford ed.). Vol. XIV, p. 142.

» Ibid., pp. 190-191.

» Ibid., p. 192.

* Henry, although he had been a violent opponent of the adoption of the Con-
stitution, had grown rich in land and paper speculations and had become a firm
adherent of Federalism. Washington urged Henry in this letter to become a
candidate for the Virginia legislature against the Republican opposition.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 69

of its analysis of the opposition and the reasons advanced
for FederaUst decUne, deserves quotation at length: "It
would be a waste of time to attempt to bring to the view
of a person of your observation and discernment the en-
deavours of a certain party among us to disquiet the pubUc
mind with unfounded alarms ; to arraign every act of the
administration; to set the people at variance with their
government ; and to embarrass all of its measures. Equally
useless would it be to predict what must be the inevitable
consequences of such a policy, if it cannot be arrested.

"Unfortunately, and extremely do I regret it, the state
of Virginia, has taken the lead in this opposition. ... It
has been said that the great mass of the citizens of this
state are well-affected, notwithstanding, to the general
government and the Union ; and I am willing to believe
it, nay, do beheve it ; but how is this to be reconciled with
their suffrages at the elections of representatives, both to
Congress and their state legislature, who are men opposed
to the former and by the tendency of their measures would
destroy the latter? Some of us have endeavoured to ac-
count for this inconsistency, and though convinced them-
selves of its truth, they are unable to convince others,
who are unacquainted with the internal policy of the state.

"One of the reasons assigned is, that the most respectable
and best qualified characters among us will not come for-
ward. Easy and happy in their circumstances at home,
and believing themselves secure in their liberties and prop-
erty, they will not forsake their occupations and engage in
the turmoil of public business or expose themselves to the
calumnies of their opponents, whose weapons are detraction.

"But, at such a crisis as this, when everything dear and
valuable to us is assailed ; when this party hangs upon the
wheels of government as a dead weight, opposing every

70 ECONOMIC ORIGINS OF JEFFERSONIAN DEAIOCRACY

measure that is calculated for defence and self-preservation,
abetting the nefarious views of another nation upon our
rights . . . when every act of our government is tortured,
by constructions they will not bear, into attempts to in-
fringe and trample upon the constitution with a view to
introduce monarchy .... AVhen measures are systemat-
ically and pertinaciously pursued, which must eventually
dissolve the Union or produce coercion ; I say, when these
things have become so obvious, ought characters who are
best able to rescue their country from the pending evil to
remain at home ? . . .

"Vain will it be to look for peace and happiness, or for
the security of liberty or property, if civil discord should
ensue. And what else can result from the policy of those
among us, who, by all the measures in their power, are
driving matters to extremity, if they cannot be counter-
acted effectually? The views of men can only be known,
or guessed at, by their words or actions. Can those of the
leaders of opposition be mistaken, then, if judged by this
rule? That they are followed by numbers, who are un-
acquainted with their designs, and suspect as little the ten-
dency of their principles, I am fully persuaded. But, if
their conduct is viewed with indifference, if there are ac-
tivity and misrepresentation on one side, and supineness
on the other, their numbers accumulated by intriguing and
discontented foreigners under proscription, who were at
war with their own governments, and the greater part of
them with all governments, they will increase, and nothing
short of Omniscience can foretell the consequences." ^

Who can doubt, after reviewing the acts of his adminis-
trations, his indorsement of, and assumption of responsi-
bility for, Hamilton's policies, his contempt for the agitations

» Wntinga (Ford ed.). Vol. XIV, pp. 136 £f.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 71

of the democratical societies, his open espousal of the Fed-
eraUst party during his last days, that Washington is to be
esteemed a Federahst in the most strict partisan interpreta-
tion of that term? That he always had the good of the
country at heart will be admitted, but he interpreted the
good of his country to mean the maintenance of the prin-
ciples for which his party stood.

Hugh Williamson, of North Carolina, a signer of the Con-
stitution, was elected a Representative to the first and
second Congresses, and almost uniformly voted with his
colleagues from that state in opposition to the administra-
tion measures. Nevertheless, he apparently did not break
with his Federahst friends, for in 1796, he warmly con-
gratulated McHenry on his appointment to the office of
Secretary of War,^ and a few months later he sought gov-
ernment employment under Washington.^ In his letter
to McHenry soUciting this favor, WiUiamson said: "The
North Carolina members are, I beheve, without exception
desirous to do anything that in their opinion would be
profitable or acceptable to me, but as they are at present
everyone in opposition to the government, I know they
would not willingly ask favors. Wherefore I have never
intimated to any one of them that I would accept of any
employment." ^

1 Steiner, Life and Correspondence of McHenry, p. 164.

2 Ibid., p. 178.

« The following letter of Williamson to Hamilton in 1794 would indicate decided
Federalist leanings: "In travelling through the country I have lately observed a
considerable uniformity of sentiment among the people with a great want of con-
sistency of which they do not themselves appear to be conscious. There are fre-
quent complaints of the want of vigorous measures in the executive to resent the
insults of the British nation. This they receive from a certain class of politicians
and political writers. There is also an observation almost universal among the
planters that 15 or 20 years longer peace would make us so rich and powerful that
we should despise the attempt of any nation on earth. This opinion is their own
and they seem not to suspect until the system is explained that the advocates for
vigorous measures are in effect courting a general war in the hope of destroymg

72 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

James Wilson, of Pennsylvania, a signer of the Constitu-
tion, was a member of the state ratifying convention and
the leading champion of the new system before that body.
He was appointed Associate Justice of the Supreme Court
in 1789 by Washington and retained that post until his
death in 1798. Of Wilson's Federalism there can be no
question, although he was not very actively engaged in
politics after his appointment to the bench. Certainly his
opinions rendered as Associate Justice were all in accord
with Federalist doctrines.

George Wythe, of Virginia, did not sign the Constitution,
because he was absent at the close of the Convention, but
there is no doubt that he favored its ratification.^ Wythe
was not an active politician. His position as Chancellor of
Virginia would have precluded that, had he not been by
temper a lover of the study rather than of the forum. He
was, however, opposed to the Jay treaty.^ Moreover, he
was a warm and intimate friend of Jefferson and his personal
inclinations would have carried him over to the Republican
group if there had been no other motives. Wythe was a
Republican presidential elector in 1800 and in 1804, and
was loyal to his friend Jefferson until his death in 1806.^

Robert Yates, of New York, left the Philadelphia conven-
tion early, because he thought that body had exceeded its
powers in casting aside the Articles of Confederation. He
was a stout opponent of the Constitution in New York
and as a member of the state convention voted against

public credit and overturning a government to which they have been uniform
enemies. I verily believe that this war making project, when well understood, will
produce a considerable apostacy from Antifederalism." Hamilton Mss., May 27,
1794.

> Madison, Works (Hunt ed., 1904), Vol. V, p. 120.

« Ibid., Vol. VI, p. 237.

•Jefferson, Works (Ford ed.). Vol. IX, p. 288; Jefferaon Mss., 2d Series, Vol.
XXVIII, No8. 127-130.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 73

ratification. He was a judge of the supreme court in New
York from 1777 to 1790 and chief justice of the same tri-
bunal from the latter year until 1798. After the adoption
of the Constitution, Yates conciliated the Federalists by
charging grand jurors to support and preserve the Constitu-
tion, and for this service he was nominated by the Federal-
ists for the office of governor in 1789 against the great op-
ponent of the Constitution, George Clinton. A historian
has accounted for this change of front by referring to Yates'
deep passion for office,^ and this may be a correct interpre-
tation of his motives, for it is certain that until the end he
was at heart an Anti-Federalist.

With reference to their later political activities, the fifty-
five members of the Philadelphia Convention may be divided
into seven groups :

1. Members who died before the Federalist-Republican
schism was clearly developed : Brearley, Franklin, Houston,
of New Jersey, Jenifer, Livingston, and Pierce — 6.

2. Advocates of the Constitution who remained loyal
Federalists until the end : Bassett, Bedford, Blair, Clymer,
Davie, Dayton, Ellsworth, Fitzsimons, Gorham, Hamilton,
IngersoU, Johnson, King, McHenry, Mifflin, Gouverneur
Morris, Robert Morris, Paterson, C. C. Pinckney, Read,
Rutledge, Sherman, Strong, Washington, and Wilson — 25.

3. Advocates of the Constitution who went into the op-
position early in Washington's administration : Baldwin,
Few, Gilman, Madison, and Wythe — 5.

4. Advocates of the Constitution who joined the opposi-
tion after the fiscal measures contemplated by the Constitu-
tion were firmly established : Butler, Dickinson, Langdon,
A. Martin, Charles Pinckney, Randolph, Spaight — 7,

' D. S. Alexander, Political History of the State of New York, Vol. I, p. 41.

74 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

5. Advocates of the Constitution unclassified : Blount,
Broom, Carroll, Houstoun, of Georgia, McClurg, and Wil-
liamson — 6.

6. Opponents of the Constitution who became Repub-
licans: Gerry, Lansing, L. Martin, Mason, Mercer, and
Yates — 6.

7. Opponents of the Constitution who became Federalists
— 0.

These figures are highly significant. Not a one of the
members of the Convention who opposed the Constitution

^ went over finally to the Federalists.^ They all fought the
adoption of the Constitution ; they soon went into the op-
position ; and they remained RepubHcans until they closed
their public careers. Nearly all of the members who Hved a
few years after the Constitution was adopted may be as-

^ signed to one or the other party with a reasonable degree of
accuracy. Of the forty-three members of the Convention
who supported the Constitution, and who lived several
years after its adoption, six cannot be satisfactorily
classified, leaving thirty-seven susceptible of classification.
Of these thirty-seven, twenty-five became loyal Federalists
and twelve became RepubHcans — seven not until the
fiscal measures contemplated by the Constitution were

ysT estabUshed. Of the advocates of the Constitution who
went over to the Republicans, one half, Baldwin, Butler,
Dickinson, Madison, Charles Pinckney, and Randolph,
were among the most vigorous champions of property rights
in the Convention and among the leading opponents of
anything approaching simple majority rule under universal
manhood suffrage. Among the twelve advocates of the

• It should he noted, however, that the heavy security holder Gerry voted for
all of Hamilton's fiscal measures before he definitely joined the opposition. For
personal reasons he supported Adams in 1796.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 75

Constitution who became Republicans, all except three,
Oilman, Dickinson, and Langdon, were from the South.

Of course, we are not warranted in assuming that the
members of the Philadelphia Convention, in the distribution
of their political affiliations, were precisely representative
of the country at large. Nevertheless one cannot help
surmising that very few of the Anti-Federalists who opposed
the adoption of the Constitution in 1787-1788 ever went i
over to the Federalist party, that the bulk of the Federalist
party was composed of those who had supported the for-
mation and adoption of the Constitution, and that most
advocates of the Constitution who did become Republicans
were not carried over by any theoretical considerations con-
cerning "the cherishment of the people." At all events,
the burden of proof would seem to be on those who say that
there was no fundamental connection between the parties
i of the constitutional conflict and the political parties which
arose in Washington's administrations.

Certainly there is important contemporary evidence toV*
the effect that the party which rallied around Hamilton's
measures — which were in fact the fundamental measures
of the first administrations under the new Constitution — .
was substantially the same as the party that had sup-
ported the Constitution. Writers of the period were con-
stantly dwelling on the identity between the opposition to
the Constitution and the opposition to Federalist measures. V
For example, a writer in the Oazette of the United States,
on July 11, 1792, declared : "The opposers of the measures
which have received the sanction of the Legislature of the
United States are generally the same persons who opposed
the adoption of the new Constitution and were the advocates
of committee systems and paper expedients in the days of our
humiliation." A month later, August 15, 1792, a writer in

76 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

the same paper added: "There are men among us who
have always been known as partisans and violent ones too
— these say they are opposed to the measures of the gov-
ernment only. But let memory do its office. They have
been hostile to the Constitution of the United States — and
if they now pretend to be converted, their conversion is

N6nly a pretense." Hamilton was not indulging in partisan
argument when he contended that the two great classes of

'security holders and men of kindred property interests,
who had supported the formation and adoption of the
Constitution, also looked to the new government for an

"^adequate provision for public credit.^

*^ Throughout his political career, Hamilton consistently
., regarded the RepubHcan party as the party of opposition
to the Constitution and the fiscal measures of the federal
government. As late as 1801, he said that the FederaUsts
had justly represented their opponents as hostile to the
national Constitution, "because, as a party, and with few
exceptions, they were violent opposers of the adoption of
the Constitution itself ; . . . because the amendments sub-
sequently made, meeting scarcely any of the important
objections which were urged, leaving the structure of the
government and the mass and distribution of its powers
where they were, are too insignificant to be with any sensible
man, a reason for being reconciled to the system if he thought
it originally bad ; . . . because they have opposed not
particular plans of the administration but the general course
of it and almost all the measures of material consequence,
and this, too, not under one man or set of men, but under
all the successions of men ; . . . because, as there have been
no alterations of the Constitution sufficient to change the
opinion of its merits, and as the practice under it has met

» HamUton, Works (Lodge cd.). Vol. VII, pp. 418, 419.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 77

with the severest reprobation of the party, there is no cir-
cumstance from which to infer that they can really have
been reconciled to it." ^ . ^

Of course the Republicans sometimes denied the charge
that their party was made up of former opponents of the
Constitution. The measures of the new government fur-
nished them with plenty of political ammunition, and it was
not necessary for them to assume the unnecessary burden
of overthrowing the Constitution itself. Certainly there
was no hope of securing converts to the Republican cause
from among the friends of the Constitution, if they con-
tinued to pose as the party of opposition to the fundamental
law itself. With extraordinary cleverness which can,*^^
nevertheless, be quickly penetrated by any one who knows
the history of the period, Republican writers claimed the -
Constitution for themselves and denounced, as open and
flagrant violations of that instrument, the very measures '
which had the support of nearly every member of the con-
stitutional Convention, who found a place in the new
government, — as if the unnatural fathers had destroyed
their own progeny.

No better illustration could be found of the way in
which the Republicans turned the Constitution to their
own advantage and declared its original purposes to be
their own purposes than in John Taylor's Inquiry into the
Principles and Tendencies of Certain Measures published in
1794.^ Throughout this pamphlet, he assumed that the
entire fiscal system was contrary to the letter and spirit of *
the fundamental law drafted in 1787. In other words,
Taylor had the moral courage to declare in print that the
men who framed the Constitution did not know what their

> Works (Lodge ed.), Vol. VII, p. 185.
* See below, p. 197.

78 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

intentions were at the time and afterward violated persis-
tently and consistently their own instrument of government
when called upon to put it into practical operation.

^ Speaking of the funding system Taylor said : "It was and
is the fashion of thinking that a public debt unequally held
gives permanency and weight to government. That is, to
use plain terms, it will enable government to control the
will of the people, by counterbalancing it with the weight of
wealth. The Constitution is compiled upon a principle
precisely in opposition to this idea. The sovereignty of the
people gave it birth and it acknowledges their parental
authority. This is a design of a few individuals, exclusively

. to appropriate to themselves the management of the na-
tional offspring, that they may change its nature and de-
bauch its affections from the great object of its political
duty. It is an attempt to transplant the Constitution
from democratic ground in which it might flourish to an
aristocratical soil in which it must perish. . . . The tone of
this instrument also [the funding system] in its several
vibrations, harmonizes with the perilous design radically
to destroy the Constitution and to erect upon its ruins an
usurpation not sanctioned by the national will or acknowl-
edging the fundamental principle that the people are the
only legitimate fountain of civil government." In Taylor's
opinion it was the mission of the Republicans to restore the

*H;^onstitution to its "pristine health and proper functions !"
The Federalists were quick to penetrate the assertions of
those Republicans who claimed to be the genuine defenders
of the principles and purposes of the Constitution. A
Connecticut writer in the Litchfield Monitor, in the
summer of 1800, levelled his guns against the new "friends
of the Constitution," declaring them to be in fact the original
enemies unregenerate : "They [the Jeffersonians] profess an

PARTY AFFILIATIONS OF CONVENTION MEMBERS 79

attachment to the Constitution and pretend only to disHke
some of the measures of the administration. BeUeve me, V
fellow citizens, they have erected batteries against the
Constitution itself, batteries too formidable to be held in
contempt. They have exerted themselves everywhere to
bring into office those influential characters who were
originally opposed to the adoption of the Constitution; and
they have succeeded beyond their most sanguine hopes in
New York, Pennsylvania, and the Carolinas. In New
York, the former Governor Clinton, Col. Burr, Mr. Osgood,
Brockholst Livingston, and a number of others who were
bitterly hostile to the Constitution originally are now
elected members of the Assembly for the purpose of ap-
pointing electors who will vote for Mr. Jefferson as Presi- .
dent. In Massachusetts, the Democratic candidate for
governor last spring was Mr. Gerry who was a member of
the Grand Convention that formed the Constitution and
opposed it in all its stages . . . and now will you believe that
this party can be sincerely attached to the Constitution. Child-
ish credulity itself must stand abashed at the idea. Satan's
temptation of our Saviour was not more impudent than
such professions united with such conduct. It is the Con-
stitution itself which they abhor ; and they abhor it because
it does not estabhsh the reign of modern philosophy and
philosophers." ^

There was, in fact, a fatal inconsistency in the Republican
contention that the Federalists were threatening, by "aris-
tocratic" measures, to overturn the Constitution, which
they had created ; and one extreme champion of democracy,
Callender, flatly refused to accept the newly made tradition
that the Constitution was the work of the whole people.
On the contrary he declared it to have been in a great

1 Reprinted in the Connecticut Courant, August 18, 1800.

80 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

measure established by the very "aristocrats" themselves
— the traders in public securities. When in 1798, some
officers and soldiers of New Jersey remonstrated with
President Adams about his foreign policy, he replied :
"Your government is not, I hope, to be called a party ; if
a government of your own choice is a party, how can you
obtain one which will not be so ? " This assertion, Callender
analyzed with his customary vehemence. The Constitution,
he represented, had been adopted by a majority of the people,
only after a violent struggle, during which the public had
been coerced by threats and misled by false promises. It
had been said, ran his argument, that there was grave danger
of invasion by foreign powers, that a unified nation would
have greater weight in negotiating treaties with other coun-
tries, that the national debt should be extinguished, and
that the Eastern states might conquer the South ; and these
contentions induced the people to approve the Constitution.
But in spite of the false arguments used in support of the
' ratification, the battle had been won by a narrow margin.
In very truth, continued Callender, the federal Constitu-
tion has been "crammed down the gullet of America. . . .

J The 'government of your own choice' met with long and
violent resistance to its adoption. In Virginia it was carried
by eighty-nine votes against seventy-nine. From ten to
thirty of the majority have long since repented of their
vote. ... In Massachusetts, the federal question was
carried by an hundred and eighty-seven votes against an
hundred and sixty-eight. Georgia was poor and help-
less. ... In New York, the Constitution was accepted
by thirty voices against twenty-five ; in Rhode Island by a
majority of two. In North Carolina it was at first rejected
by a large majority. Hence it follows that the new govern-

'**'^ment was only preferred by a part of the people. On this

PARTY AFFILIATIONS OF CONVENTION MEMBERS 81

account, Mr. Washington hath since declared that the
federal constitution should not have been adopted. For, in his
farewell letter of September 17, 1796, he remarks that 'the
constitution which at any time exists, till exchanged by an
explicit act of the whole people, is sacredly obligatory upon
all.' In Virginia, this Constitution met not only with
violent, but with at least equiponderant opposition. In all
the other states the people were greatly divided. All the
atrocious artifices common at an ordinary election were
exerted in support of it. . . . That the federal system had V
been embraced by the whole people never was, nor could be
pretended. Yet the first federal Congress met, in defiance
of the constitution then existing and of the sacred obligation
referred to by Mr. Washington. They met on the ruins
of the old confederation, and sacrificed a variety of rights
hitherto held as inviolable. They met when out of the
thirteen states eleven only had acceded to the Union. . . .
On March 3, 1789, when the first Congress assembled, they j
bore about them every feature that corresponds with the
definition of traitors, as just quoted from Mr. Washington
himself. . . . The farewell address conveys an explicit
censure not only upon the new government, but likewise
upon the American revolution ; for that was accompHshed
by a part of the people, in despite of the rest, and in breach
of what is called the British constitution. By his own ac-
count, therefore, Mr. Washington has been twice a traitor.
He first renounced the king of England, and thereafter the
old confederation." ^

This "treasonable" work by a minority, this formation v
of the Constitution in the teeth of public opinion, Callender
declared to have been, in a large part, the wicked deed off
the security holders. "The new Constitution," he ex-

1 The Prospect Before Us, Vol. I, pp. 9 fl.
G

82 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Vclaimed, "had been in a great measure established by the
influence and activity of the traders in these certificates." ^
And then with extraordinary complacency, in the face of his
own attack upon the Constitution, Callender denounced the
"six per cent regiment" in Congress as having given to the
Constitution, within their twenty-three months' existence,
"a blow from which it has almost no chance of recovery,"
as if the men who had been instrumental in framing and
adopting it were planning the destruction of their own

vhandiwork.^

Inasmuch as the RepubUcan publicists and pamphleteers
were contradicting themselves about the relation of the
FederaHst party to the party of the Constitution, it is not
surprising to find the Federalists ridiculing them. The
latter were constantly pointing out the fallacy of the con-
tention that the subversion of the new fundamental law
was the purpose of Federalism. Speaking of the Repub-
licans who charged the Federalists with being enemies to the

, Constitution, a writer in the United States Gazette said :
"They chatter about the partizans of kingly power and
affect to consider the plan of subverting our republican
government and free Constitution as well matured. . . .

Mlie certificate men, the stockholders of the bank, the tools
of the ministry, the aristocrats, are all conspirators against
liberty ; in short all the men who wish to buoy up the present
government. Strange! that a plan against liberty and the
Constitution should be supported by those who are ridiculed
' for puffing the Constitution and the present happy condition
of the Union, and above all, who are for buoying up the
government. ... Is it not plain that all the property
created by the bank and funding system depends on pre-
serving the Constitution unchanged ? . . . Or will our wise

> Sedgvoick & Co., or a Key to the Six Percent Cabinet. ' Ibid.

PARTY AFFILIATIONS OF CONVENTION MEMBERS 83

ones pretend that men of property are the first to plot rev-
olutions and civil convulsions? But those who delight toi
cry knave, speculator, aristocrat, and kingly power take
both sides of a contradiction, and maintain each with equal
good temper and good sense." ^ V

In this contest between the friends and enemies of the
Constitution, Jefferson occupied a position of peculiar ad-
vantage. He had been in Paris when the Constitution was
framed and adopted. He had approved parts of the instru-
ment and disapproved other parts so that he could, with
some show of justification, be claimed as a friend or an
enemy. In fact, Jefferson refused to be classed either as
Federalist or an Anti-Federalist in the spring of 1789,
declaring that if he could not go to heaven except with a
party he would not go at all. "Therefore I protest to you,"
he wrote to Hopkinson, "I am not of the party of federalists.
But I am much further from that of the Antifederalists.
I approved from the first moment of the great mass of what V
is in the new constitution, the consolidation of the govern-
ment, the organization into executive, legislative, and
judiciary, the subdivision of the legislative, the happy com-
promise of interests between the great and little states by
the different manner of voting in the different houses, the
voting by persons instead of states, the qualified negative
on laws given to the executive, which however I should have |
liked better if associated with the judiciary as in New York,
and the power of taxation. I thought at first that the latter
might have been limited. A little reflection soon convinced
me that it ought not to be." The points of objection urged
by Jefferson were the want of a bill of rights to secure in-
dividual liberty "against the legislative as well as the execu-
tive, branches of the government," and the perpetual

1 The Gazette of the United States, June 6, 1792.

84 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

reeligibility of the President.^ The student of poHtical
psychology will, therefore, find it extremely interesting to
discover that the first President elected by the Republicans
could, with equal justice, be claimed as an opponent or a
friend of the Constitution at the time of its formation and
adoption.

' Doeumentary History of the Constitution, Vol. V, p. 169.

CHAPTER III

THE PERSONNEL OF THE FIRST ADMINISTRATION

No one who turns over carefully and patiently the letters
and papers of the leaders in the constitutional conflict can
accept for a moment the theory that on the morning after
the ratification of the Constitution the opposing forces laid
down their arms on the pleasing assumption that the battle
was over.^ Statesmen, such as they, were fully aware of
the fact that there was no magic in the language of the
instrument of government itself that could ex proprio vigore
call the new system into being. Its champions as well as
its opponents knew that its real character was to be deter-
mined by the measures of law and administration to be
established under it.

1 Documentary History of the Constitution, Vols. IV and V, contains valuable
materials on this point. "The progress which had been made [by the time of the
inauguration of Washington] in assuaging the bitter animosities engendered in the
sharp contest respecting the adoption of the Constitution, and the means which
might be used for conciliating the affections of all good men to the new government,
without enfeebling its essential principles, were subjects of the most interesting
inquiry. The agitation had been too great to be suddenly calmed ; and for the
active opponents of the system to become suddenly its friends, or even indifferent
to its fate, would have been a victory of reason over passion, or a surrender of indi-
vidual judgement to the decision of the majority, examples of which are rarely
given in the progress of human affairs. In some of the states, a disposition to ac-
quiesce in the decision which had been made and to await the issue of a fair experi-
ment of the Constitution, was avowed by the minority. In others, the chagrin
of defeat seemed to increase the original hostility to the instrument; and serious
fears were entertained by its friends, that a second general convention might pluck
from it the most essential of its powers, before their value, and the safety with which
they might be confided where they were placed, could be ascertained by experience.
... In all those states where the opposition was sufficiently formidable to inspire
a hope of success, the effort was made to fill the legislature with the declared *
enemies of the government, and thus commit it, in its infancy, to the custody of its
foes." Marshall, Life of Washington (2d ed.). Vol. II, p. 150.

86 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

The Constitution, when it left the hands of the Conven-
tion in the autumn of 1787, was simply a proposition for the
conduct of public affairs filled with economic implications
which were at once seen, at least in part, by its shrewdest
opponents.^ To make it a mere lawful instrument of gov-
ernment, it was necessary to secure the ratification of at
least nine states. Even with ratification, the battle was not

N^alf won. All depended upon the character of the men who
filled the offices and determined the policies and measures
of the new government. The clauses of the Constitution'
were on their face somewhat uncertain promises of a system

'to be created. The full potentialities were only understood
by the bold spirits in the secret assembly that framed it —
those who opposed it on economic grounds only roughly
divined the precise powers which could be exercised under

*\the new instrument.

N/ The Constitution did not even go into effect when Wash-
ington was inaugurated first President. The wisest men
knew that it was only a figment of the imagination then.
It did not go into effect until the economic measures which
its adoption implied were put upon the statute books and
carried into execution — not until the debt was funded and
adjusted, finances put on a sound basis, revenue laws put

I into force, commerce and manufacturing encouraged, a

' land policy forged out, and a national judicial system estab-
lished, bringing federal law to the door of every litigant
seeking his rights under the Constitution. Only when the
President and Congress had been chosen, the corps of judges,
marshals, attorneys, collectors, and revenue officers duly
installed, the army and navy organized — in fact the whole

> See particularly the debates in the Virginia ratifying Convention, Elliot,
Debates, Vol. III. Mason even prophesied an excise tax that would reach the
homes of the backwoods farmers. Sec below, Chap. IX. See also Economic In-
terpretation of the Constitution, Chap. XI.

THE PERSONNEL OF THE FIRST ADMINISTRATION 87

machine set in motion throughout the length and breadth of
the American empire — collecting revenue, paying the
national debt, making and enforcing commercial regula-
tions for the benefit of domestic trade and manufactures, .
determining suits between parties, fighting Indians, lay-
ing off Western lands did the Constitution become a real
pohtical organism influencing the hves and property of
the people. Then it was that the process of government
under the Constitution began to be reahzed. Then it
was discovered, as Madison said, who was to govern the
country.

Certainly, the most active members of the Philadelphia v
Convention knew that the general language of the Consti-
tution needed to be filled with concrete meaning in the form
of definite statutes and that many of the clauses could only
be correctly interpreted by men rightly affected toward the
new instrument. They were accordingly doubly anxious
about the first elections, about the choice of men to fill the
various offices high and low in the new government. They
were fully aware of the deep opposition to the Constitution
and of the slender character of the "victory" which they
had just won, and the most determined plunged at once into i
politics — manipulation and negotiation — in the hope of
securing the election of men who could be trusted to lay
the foundations of the federal system firmly in the measures
contemplated by the framers. Even Washington whose
dignity and reserve precluded his taking part personally in
the bitter combats of the forum, wrote voluminous political
letters ^ during the campaign that followed the ratification

1 Madison wrote to Jefferson from the seat of government on July 10, 1792 :
"It pretty clearly appears, also, in what proportions the public debt lies in the
country, what sort of hands hold it, and by whom the people of the United States
are to be governed." Writings (1867 ed.), Vol. I, p. 583.

2 See Documentary History of the Constitution, Vols. IV and V.

88 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

of the Constitution, and he was in this manner no less
effective than others who took the stump.

In more than one letter sent out from Mt. Vernon, he
expressed his anxiety over the approaching elections to the
first Congress and warned his correspondents that the
battle was not won with the formal ratification of the Con-
stitution, that nearly everything depended on the "federal

'character" of those who undertook the inauguration of the
projected system. After recounting to Major-General Lin-
coln, on August 28, 1788, the recent rapid strides of federal-
ism he added a caveat "that attempts will be made to

.procure the election of a number of anti-federal characters
to the first Congress in order to embarrass the wheels of
government and produce premature alterations in its Con-
stitution. How these hints, which have come through
different channels, may be well or ill founded, I know not ;
but it will be advisable, I should think, for the federalists
to be on their guard so far as not to suffer any secret machina-
tions to prevail without taking measures to frustrate them.
... I wish I may be mistaken in imagining that there are
persons, who upon finding that they could not carry their
point by an open attack against the Constitution, have some
sinister designs to be silently effected, if possible. But I
trust in that Providence which has saved us in six troubles,
yes in seven, to rescue us again from any imminent, though
unseen dangers. Nothing, however, on our part ought to
be left undone." ^

Writing to Lincoln two months later, Washington dwelt
at length upon the crucial nature of the impending federal
elections : "As the period is now rapidly approaching which
must decide the fate of the new Constitution, as to the
manner of its being carried into execution and probably as

' Documentary History of the Conatitution, Vol. V, pp. 34, 40.

THE PERSONNEL OF THE FIRST ADMINISTRATION 89

to its usefulness, it is not wonderful that we should all feel
an unusual degree of anxiety on the occasion. I must
acknowledge that my fears have been greatly alarmed, but
still I am not without hopes. . . . There will however he no
room Jor the advocates oj the Constitution to relax in their exer-
tions; for ij they should he lulled into security, appointments
of antifederal men may probably take place; and the conse-
quences which you so justly dread be realized." ^

The tentative character of the gains so far made and the ^
absolute dependence of the new system upon the continued
active support of those who had been instrumental in launch-
ing it were all made plain in Hamilton's famous letter to
Washington, urging him to accept the presidency : " It
cannot be considered as a compliment to say that on your
acceptance of the office of President the success of the new
government in its commencement may materially depend.
Your agency and influence will be not less important in pre-
serving it from the future attacks of its enemies than they
have been in recommending it in the first instance to the
adoption of the people. Independent of all considerations
drawn from this source, the point of light in which you
stand at home and abroad will make an infinite difference
in the respectability with which the government will begin
its operations in the alternative of your being or not being
at the head of it. I forbear to urge considerations which
might have a more personal application. What I have said,
will suffice for the inferences I mean to draw.

"First. In a matter so essential to the well-being of
society as the prosperity of a newly instituted government,
a citizen of so much consequence as yourself to its success
has no option but to lend his services if called for. Permit
me to say that it would be inglorious in such a situation

> Ibid., Vol. V, p. 98. Italics mine.

90 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

not to hazard the glory, however great, which he might
have previously acquired.

"Secondly. Your signature to the proposed system
pledges your judgment for its being such a one as, upon
the whole, was worthy of the public approbation. If it
should miscarry (as men commonly decide from success, or
the want of it), the blame will, in all probability, be laid
on the system itself, and the framers of it will have to en-
counter the disrepute of having brought about a revolution
in government, without substituting anything that was
worthy of the effort. They pulled down one Utopia, it
will be said, to build up another. This view of the subject,
if I mistake not, my dear sir, will suggest to your mind
greater hazard to that fame, which must and ought to be
dear to you, in refusing your future aid to the system than
in affording it. I will only add that, in my estimate of the
matter, that aid is indispensable." ^

The very considerations which Hamilton urged upon
Washington to induce him to accept the office of President
in the first instance were again brought to bear in 1792 to
wring from him his consent to serve a second time. The
Constitution is not yet securely founded, its enemies are
as watchful and energetic as ever, and the federal govern-
ment has not passed all its crucial tests. Writing on July 30,

> Hamilton, Works (Lodge ed.), Vol. VIII, p. 196. See also Documentary His-
tory of the Constitution, Vol. IV, p. 288. Hamilton's sentiments were echoed
throughout the country. For example, the Mechanics and Manufacturers Asso-
ciation of Providence presented the following address to Washington in 1790 :
"Pleased with the establishment of a firm government, we are happy in thus hav-
ing it within our power to express our sentiments of regard and attachment to the
President of the Union, and our determination, as far as in us lies, to support the
Constitution and laws of the United States. The Mechanics and Manufacturers
of this town feel a conBdence in the wisdom and patriotism of the legislature of the
United States, — that they will do all in their power to promote the manufactures,
as well as agriculture and commerce, of our country ; this confidence is greatly
strengthened by the consideration that you. Sir, are at the head of it." Gazette
of the United States, July 28, 1790.

THE PERSONNEL OF THE FIRST ADMINISTRATION 91

1792, Hamilton declared to Washington : " 'Tis clear, says
everyone with whom I have conversed, that the affairs of
the national government are not yet firmly established —
that its enemies, generally speaking, are as inveterate as
ever — that their enmity has been sharpened by its success,
and by all the resentments which flow from disappointed
predictions and mortified vanity — that a general and strenu-
ous effort is making in every state to place the administration
of it in the hands of its enemies, as if they were its safest
guardians — that the period of the next House of Repre-
sentatives is likely to prove the crisis of its permanent char-
acter — that if you continue in office nothing materially
mischievous is to be apprehended, if you quit, much is to
be dreaded — that the same motives which induced you to
accept originally ought to decide you to continue till matters
have assumed a more determined aspect — that indeed it
would have been better, as it regards your own character,
that you had never consented to come forward than now to
leave the business unfinished and in danger of being undone
— that in the event of storms arising there would be an im-
putation either of want of foresight or want of firmness. . . .
If a solitary vote or two should appear wanting to perfect
unanimity, of what moment can it be? Will not the few-
ness of the exceptions be a confirmation of the devotion of
the community to a character which has so generally united
its suffrages after an administration of four years at the
head of a new government, opposed in its first establishment
by a large proportion of its citizens and obliged to run
counter to many prejudices in devising the arduous arrange-
ments requisite to public credit and public order? ^ "

At no time during the period intervening between the
ratification of the Constitution and the inauguration of the

1 Hamilton, Works (Lodge ed.), Vol. VIII, p. 274.

92 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

new government were the leaders in Federalism certain that
the agrarian party which had opposed the Constitution
might not render the instrument ineffectual by securing
possession of Congress. "The murmurs of partial discon-
tent, cloak'd under what is called here antifederalism, seem
now greatly to abate," wrote Crdvecoeur to Jefferson in
October, 1788, "there remains but one wish which is,
that those country parties may not preponderate in the
choice of federal Senators and Delegates ; if a majority of
federalists can be obtained in those two bodies everything
will go smoothly on. Their first session, which is to begin
in March, will put the finishing hand to the great organiza-
tion : but an amazing task when one considers the extent
of all the departments." ^ It was not until January 5, 1789,
that Cr^vecoeur was able to announce his conviction that
the nail was clinched and the future of the government
assured.^

Jefferson himself was very uncertain whether the temper
of the people had moderated sufficiently to permit the gov-
ernment under the Constitution to set out on a smooth
course. "Our political machine is now pretty well wound
up," he wrote to Colonel W. S. Smith, on August, 2, 1788,
"but are the spirits of our people sufficiently wound down
to let it work glibly?" Indeed, he was not anxious for a
too ready acquiescence in the strong government which the
new order promised, for he added: "I trust it is too soon
for that, and that we have many centuries to come yet before
my countrymen cease to bear their government hard in
hand." '

Opponents of the Constitution were no less anxious about
the outcome of the first elections than were the stoutest

' Documentary History of the Constitution, Vol. V, p. 93.

« Ibid., Vol. V, p. 145. »Ibid., Vol. V, p. 1.

THE PERSONNEL OF THE FIRST ADMINISTRATION 93

Federalists. For instance, Clinton in New York and Patrick
Henry in Virginia were quite as much concerned about the
character of the Senators, Representatives, and federal officers
as they had been about the adoption of the Constitution
itself. Of course, it was not any longer a question of an
outward loyalty to the general system established by the
Constitution. It was easy to do lip service. It was a far
more fundamental question what measures were to be
realized under the Constitution. The Anti-Federalists ,
looked beyond the language of the instrument to the process
of government which it implied.

An excellent account of the way in which the opposition
read into the phraseology of the Constitution the measures ^
contemplated by its sponsors is afforded by Hamilton's de-
scription of the attitude of the Anti-Federalists in New York.
"The leaders of the party hostile to the Constitution," '
wrote Hamilton, on June 8, 1788, "are equally hostile to
the Union. They are, however, afraid to reject the Con-
stitution at once, because that step would bring matters to
a crisis between this state and the states which had adopted
the Constitution, and between parties in the state. A
separation of the Southern District from the other parts of
the State, it is perceived, would become the object of the
Federalists and of the neighboring states. They therefore
resolve upon a long adjournment as the safest and most
artful course to effect their final purpose. They suppose
that when the government gets into operation, it will he obliged
to take some steps in respect to revenue, etc., which will furnish
topics of declamation to its enemies in the several states and
will strengthen the minorities. If any considerable discontent
should show itself, they stand ready to head the opposition." ^

It is clear from his letters that the political contest of

» Works (Lodge ed.). Vol. VIII, p. 187. Italics mine.

94 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

1788-1789 must have been regarded by Hamilton as simply a
continuation of the fight over ratification. Indeed, he knew
from first-hand experience that it was, for he plunged into
politics as soon as the call for the federal elections went forth
and he met again the old enemies who had fought him and
the Constitution at Poughkeepsie. Whoever takes the
trouble to examine the newspapers and correspondence of
the period of the presidential and congressional elections
will find the same partisan flavor that characterized the
constitutional struggle.-^ Everywhere the leaders in the
campaign treated the conflict as the old battle between
Federalists and Anti-Federalists, and in the main the same
personalities stand out on both sides of the battle line.^

There can be no doubt that the directors of the opposing
forces watched the elections with great care and followed
the results closely. As early as November 23, 1788, Hamil-
ton had fairly estimated the drift of political sentiment in
nearly every state, for on that day he wrote to Madison as
follows : "In Massachusetts the Electors will, I understand,
be appointed by the legislature and will be all Federal, and

1 Economic Interpretation of the Constitution, Chap. XI.

2 The following letter written by Tench Cox to Madison (New York, January 27,
1789), for instance, has exactly the same tone as many of the letters written during
the struggle over the ratification of the Constitution and shows identically the same
political cleavage: "The State of New York still retain their impressions against
the Constitution. They still decline to elect Senators upon legislative principles,
and I think an absence of two of the Senate is, from Appearances determined on to
avoid the precedent of conceding their due legislative independence — They will
have two antifdlts, and no Merchant in their Senate. Massachusetts & Pennsa.
alone have attended to mercantile character in the Senate, which will assist in
obviating the Objections to the commercial powers of that body — This is in favor
of the Constitution, but possibly not so favorable to the interests of the Union as
if there were 6vc or six merchants. The practice under the Constitution will, in
my opinion, be more agreeable to the Opposition in many other particulars than
their leaders are aware of. In this particular instance it is fortunate that our Sena-
tor is a man of extensive political information, and landed property and, tho a
practical Merchant, a friend to a pretty free System of Trade. I do not think the
most captious agriculturist in the Senate will find Mr. Morris tenacious of any
principle that will be injurious to the landed interest." Documentary History of the
Constitution, Vol. V, pp. 149-150.

THE PERSONNEL OF THE FIRST ADMINISTRATION 95

it is probable will be, for the most part, in favor of Adams.
It is said the same thing will happen in New Hampshire,
and I have reason to believe, it will be the case in Connect-
icut. In this state it is difficult to form any certain cal-
culation. A large majority of the Assembly was doubtless
of an Anti-Federal complexion, but the schism in the party,
which has been occasioned by the falling off of some of its
leaders in the Convention, leaves me not without hope that,
if matters are well managed, we may procure a majority
for some pretty equal compromise. In the Senate we have
the superiority by one. In New Jersey there seems to be no
question but that the complexion of the Electors will be
Federal, and I suppose, if thought expedient, they may be
united in favor of Adams. Pennsylvania you can best
judge of. From Delaware, Maryland, and South Carolina,
I presume, we may count with tolerable assurance on
Federal men ; and I should imagine, if pains are taken, the
danger of an Anti-federal Vice-President might itself be
rendered the instrument of union. At any rate, their
weight will not be thrown into the scale of Clinton, and I
do not see from what quarter numbers can be marshalled
in his favor equal to those who will advocate Adams, sup-
posing even a division in the Federal votes. On the whole
I have concluded to support Adams, though I am not with-
out apprehension on the score we have conversed about.
My principal reasons are these : First, he is a declared par-
tisan of deferring to future experience the expediency of
amendments in the system, and (although I do not altogether
adopt this sentiment) it is much nearer my own than certain
other doctrines. Secondly, he is certainly a character of
importance in the Eastern states ; if he is not Vice-Presi-
dent, one of two worse things will be likely to happen.
Either he must be nominated to some important office, for

96 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

which he is less proper, or will become a malcontent and
give additional weight to the opposition to the government." ^

In no state apparently, except possibly Georgia,^ did the
Anti-Federalists fail to contest with the Federahsts for
representation in Congress, and in some places the battle
was as hot as the conflict over ratification. In the western
regions of Massachusetts, several elections were held before
any candidate received the requisite majority, Theodore
Sedgwick, a Federalist, being victorious at last. In another
centre of the Shays' disaffection, the Worcester district, the
Anti-Federalists were able to carry the day and return
Grout, a former adherent of the agrarian leader.^ In the
Middlesex district, the spectacle of a contest between two
former members of the Philadelphia Convention was afforded,
Gorham a Federalist, and Gerry an Anti-Federalist. The
latter carried the day, but only after having declared his
opinion that all citizens of the ratifying states were bound
to support the new government and that any opposition to
"a due administration of it" would be "unjustifiable and
highly criminal." In the Boston region, the Federahsts
elected Fisher Ames who had been a stout champion of the
Constitution in the state ratifying convention — the Anti-
Federahsts voting for Samuel Adams, who was known to
have been lukewarm in his support of the Constitution and
strongly in favor of amendments.'*

In Connecticut, the Representatives were not elected by
districts but at large and by a pecuUar process. Fifteen
candidates were at first selected by popular vote, and then
from this list were chosen by popular vote the five Repre-

» Hamilton, Works (Lodge ed.), Vol. VIII, p. 203.

•See Paullin. "The First Elections under the Constitution," Iowa Journal of
History and Politics, Vol. II, pp. 3 ff.

» Grout voted for assumption which took a big burden off the backs of the Massa-
chusetts taxpayers, and true to Shays' principles he voted against the Bank.

* Hildreth, op. cil.. Vol. I, p. 42.

THE PERSONNEL OF THE FIRST ADMINISTRATION 97

sentatives to which the state was entitled. The leader of
the delegation was Roger Sherman, who had been a mem-
ber of the Philadelphia Convention and the state ratifying
convention. Two other Representatives from Connecticut,
Jonathan Sturges and Jeremiah Wadsworth, had also been
members of the state convention. The remaining two, Ben-
jamin Huntington and Jonathan Trumbull, were Federalists
of high standing.

In New York, the Representatives were chosen by dis-
tricts and the Federalists carried the three Southern seats,
electing John Lawrence, Ebgert Benson, and William
Floyd. ^ In other words, they maintained their strength in
the regions which had been in favor of the ratification of the
Constitution.

In New Jersey, the Representatives were elected at large.
There seems to have been a hot contest between the candi-
dates on the ''eastern" and the "western" tickets, for the
polls were kept open for three or four weeks in some counties
and it required the arbitrary intervention of the governor to
bring the battle to a finish.^ The Federalists were vic-
torious, but the opposition threatened to contest the election.

In Pennsylvania, where the Representatives were elected
at large, both parties held conventions and nominated can-
didates.' The Federalists carried the day only after a sharp
battle. Two of the eight members, Clymer and Fitzsimons,
had been members of the Convention which drafted the
Constitution. Of the remaining six, four, Thomas Hartley,
F. A. Muhlenberg, Thomas Scott, Henry Wynkoop, had
been members of the Pennsylvania ratifying convention and
had voted in favor of ratification. Six of the eight, there-

* Writings of James Madison (1867 ed.), Vol. I, p. 453.
»Ibid., Vol. I, p. 453.

• Paullin, op. cil., pp. 5, 6. Pennsylvania was apparently the only state in which
the parties held nominating conventions.

98 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

fore, had been prominently identified with the formation
and adoption of the Constitution.

In Maryland, the Federahsts and Anti-FederaHsts had
tickets in the field. The Baltimore Journal of January 13,
1789, speaks of the great exertions put forth by both parties,
and it appears that the Federalists barely escaped defeat
in Baltimore, their majority over their opponents being
only seven votes. ^

The Virginia Representatives were elected by districts,
and out of a delegation of ten, only three had been among
the opponents of the Constitution, Bland, Coles, and
Parker.^ Curiously enough, Madison, who was soon
destined to become an inveterate Anti-Federahst, had for
an opposition candidate Colonel Monroe who had voted
against the Constitution in the state convention. The Vir-
ginia assembly of 1789-1790 was decidedly Anti-Federalist,
and it elected to the United States Senate Richard Henry
Lee and WilHam Grayson, the latter a particularly strong
opponent of the Constitution in his state.^

The back-country regions of South Carolina, true to their
principles, sent Anti-Federahst Representatives to the first
Congress, including two celebrated opponents of the Con-
stitution, iEdanus Burke and General Sumter."* Federalist
Charleston returned Wilham L. Smith, a gentleman of
wealth who had been in England during the Revolution,
and, on that account, was often charged with being a Tory
by some of his opponents.

When, at length, in 1790 the North Carohna delegation
arrived in Congress, it was found to contain the celebrated
Timothy Bloodworth who had been most violent in his

' PauUin, op. cit., p. 15.

« Writinas of James Madison (1867), Vol. I, p. 458.

' Ambler, Sectionalism in Virginia, p. 59.

« Hildieth, op. cit.. Vol. I, p. 45.

THE PERSONNEL OF THE FIRST ADMINISTRATION 99

opposition to the Constitution in the first convention of his
state, as well as Hugh Wilhamson who had been a member
of the Philadelphia Convention, a signer of the Constitu-
tion, and a warm advocate of the federal system.

Although it is evident from the newspapers that the rival
parties had several sharp skirmishes in some of the states,
the elections as a whole do not appear to have eUcited very-
great enthusiasm. On this point Paulhn says that "there
was little popular interest in the first elections." In Madi-
son's electoral district in Virginia the vote was only 2.7 per
cent of the white population. In Maryland, 3.6 per cent
of the white population, and in Massachusetts about 3 per
cent, participated in the first congressional elections. In
Pennsylvania, only about 15,000 voters went to the polls, a
number only shghtly in excess of that which participated in
the ratification elections of 1787. However, it does not
appear that this lethargy was any greater than it had been
in colonial times. It required the persistent agitation of
party leaders to rouse the electorate to action.

Of the fifty-five members of the first House of Represen-
tatives, nine or about one-sixth. Oilman, Gerry, Sherman,
Clymer, Fitzsimons, Carroll, Madison, Wilhamson, and
Baldwin had been members of the Convention which
drafted the Constitution. In striking contrast to this
popularly elected branch stood the first Senate, of whose
twenty-six members, no less than eleven, Langdon, Strong,
Ellsworth, Johnson, King, Paterson, Read, R. Morris,
Butler, Bassett, and Few had been members of the Phila-
delphia Convention. The only opponent of the Constitution
at Philadelphia who found his way into the first Congress
was Gerry, and he had been elected to the House only after
promising no undue opposition to the new administration.

If we examine the pohtical careers of the seventy-eight

100 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

members of the first Congress of the United States, omitting
Rhode Island which was not represented at Philadelphia
and was driven into ratification, we find that the surprisingly
large number of forty-four, that is, more than one-half,
had been members of the Philadelphia constitutional Con-
vention or of ratifying conventions in their respective states,
and many of them of both conventions. The list is impres-
sive. Of the New Hampshire delegation of five in the first
Congress, Langdon had been a member of both conven-
tions. Oilman had been at Philadelphia, and Livermore had
rendered fine service in the state convention. Massachusetts
sent ten members to the first Congress, and only three of
these had not acted directly on the adoption of the Consti-
tution ; Strong had been a member of the federal and state
conventions, Oerry had served in the former, while Dalton,
Ames, Partridge, Sedgwick, and Orout had been in the state
convention. Connecticut's delegation of five Congressmen
included three who had supported the Constitution at the
Philadelphia and Hartford conventions, Ellsworth, Johnson,
and Sherman, and two, Sturges and Wadsworth, who had
been in the state ratifying convention. New York, the state
which had been strongly against the Constitution, sent
only one member to Congress who had seen convention
service — Senator King, who had been a delegate of Massa-
chusetts to Philadelphia. New Jersey, which had ratified
unanimously, elected Paterson — a member of the Phila-
delphia convention — to the Senate, and chose new men
for the five additional posts in Congress. Of Delaware's
three congressmen, two, Bassett and Read, had been in the
federal Convention, and the former had served in the state
convention as well. Seven of Pennsylvania's ten had seen
convention service : R. Morris, Clymer, and Fitzsimons at
Philadelphia, and Hartley, F. A. Muhlenberg, Scott, and

THE PERSONNEL OF THE FIRST ADMINISTRATION 101

Wynkoop at the state convention. Of Maryland's eight,
Daniel Carroll had been in the Federal Convention and
Gale and Stone in the state convention. Virginia was en-
titled to twelve congressmen and of these Madison had been
in both conventions and Grayson, Moore, White, and Coles
in the state convention. Of North Carolina's seven,
Williamson had been in the Philadelphia convention and
Steele and Bloodworth in the first state convention. Five
of South Carolina's seven members of Congress had acted
directly on the Constitution : Butler at Philadelphia and
Izard, Smith, Burke, and Sumter in the state convention.
Georgia, entitled to five members, sent Few who had been
in both conventions, Baldwin who had served at Philadelphia,
and Mathews who had voted for the Constitution in the
state convention.

Of this long list of forty-four members of Congress who V
had been instrumental in the formation and adoption of the
Constitution, thirty-seven were reckoned as its advocates
and champions. It is evident that those who had created
the new frame of government were not indifferent as to the
measures to be realized under it, but deemed it of high and
pressing importance that the new process of government
should be continued by the men who had begun it. It is
significant also that a very large proportion of the thirty-
seven constitutional Federalists gave their hearty support
to all or nearly all of Hamilton's measures and remained
loyal party Federalists until the end. Of the seven Anti-V
Federalists of the constitutional conflict — Gerry, Grout,
Grayson, Coles, Bloodworth, Burke, and Sumter — all
but two were from the South, and with the exception of
Gerry, they were generally in the opposition, in the political
battles which were waged in Congress, and even Gerry later
cast his fortunes unreservedly with the Jeffersonian party.

102 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

"^ If we analyze the executive and judicial branches of the
government, we find an astoundingly large proportion of the
men who had been prominent and active in the formation

Vand adoption of the Constitution. The first President was,
of course, Washington who had presided over the Phila-
delphia Convention and lent the magic of his great name to
the cause of ratification. For the most important post in
his administration, that of Secretary of the Treasury, he
chose Robert Morris, a member of the Convention, and when
that gentleman declined the position, he turned to another
member of the Convention, that giant of Federalism, Alex-
ander Hamilton. For the office of Attorney-General, Wash-

I ington selected the spokesman of the Virginia delegation in
the Convention, Edmund Randolph. General Knox, of
whose stout Federalism there could be no doubt, was con-
tinued in the office of Secretary of War. Only one high
administrative position went to a man whose views on the
new government were, to say the least, somewhat uncertain.
Thomas Jefferson, who had been the representative of the
United States in France during the formation and ratifica-
tion of the Constitution, was made Secretary of State, and
placed in charge of foreign affairs.

The roll of the first appointments to the Supreme Court
of the United States by President Washington shows that
it was deemed wise to call to the high function of interpret-
ing the Constitution men who had been instrumental in

"^making it :

Chief Justice, John Jay, of New York, a member of the state
ratifying convention, who ably aided Hamilton in wringing a
reluctant approval from enough members to carry the day.

Associate Justice, John Rutledge, of South Carolina, a mem-
ber of the federal Convention and a signer of the Constitution.

Associate Justice, James Wilson, of Pennsylvania, a member

THE PERSONNEL OF THE FIRST ADMINISTRATION 103

of the federal Convention, a signer of the Constitution, and a
leader in the state convention in favor of the ratification.

Associate Justice, John Blair, of Virginia, a member of the
federal Convention, a signer of the Constitution, and a valiant
worker in the state convention for ratification.

Associate Justice, James Iredell,^ of North Carolina, one of
the most indefatigable champions of the Constitution in that
state and a member of the state ratifying convention.

William Cushing, of Massachusetts, chief justice of that state
and vice-president of the state ratifying convention.

In organizing the federal district courts under the Judi-
ciary Act, President Washington sought out a large number
of members of the state ratifying conventions and com-
missioned them to serve as judges interpreting federal law
and the Constitution, as the following list shows :

New Hampshire district, John SulUvan, president of the state
ratifying convention.

Massachusetts, John Lowell, who declined, and was succeeded
by John Davis, who had voted for the Constitution in the state
ratifying convention.

Connecticut, Richard Law, a supporter of the Constitution in
the state ratifying convention.

New York, James Duane, who had labored side by side with
Hamilton in the state convention.

New Jersey, David Brearley, a member of the federal Con-
vention, a signer of the Constitution, and a supporter of the new
instrument in the state convention.

Delaware, Gunning Bedford, a member of the federal Conven-
tion, a signer of the Constitution, and a supporter of the Con-
stitution in the state convention.

Pennsylvania, Francis Hopkinson, one of the most active
Federalists in that state, who ably aided the cause by his pen and
by negotiations. 2

1 Iredell was appointed in the place of Harrison, of Maryland, who declined the
post.

* Simpson, Eminent Philadelphians, pp. 544, 545.

104 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Maryland, Thomas Johnson, a member of the state ratifying
convention who had voted for the Constitution.

Virginia, Edmund Pendleton, the president of the state ratify-
ing convention who had supported the Constitution.

North Carolina, W. R. Davie, who had supported the Consti-
tution in the federal Convention and in both state conventions,
was nominated and declined ; John Stokes was then named, but
he died shortly ; and December 20, 1790, John Sitgreaves, who
had voted for the Constitution in the state ratifying convention,
was appointed.

South Carolina, WiUiam Drayton, who had voted for the
Constitution in the state ratif>ang convention. On June 14, 1790,
Thomas Bee was named to succeed Drayton. Bee had voted for
the Constitution in the state convention.

Georgia, Nathaniel Pendleton, resigned in 1796 and was fol-
lowed by William Stephens who had voted for the Constitution in
the state convention.

If by way of recapitulation, we call the roll of the men
who signed the Constitution, thirty-nine in number, we find
that at least twenty-six found a place in the new govern-
ment, either by election or appointment :

Abraham Baldwin, of Georgia, Representative.

Richard Bassett, Delaware, United States Senator.

Gunning Bedford, Delaware, United States district judge.

John Blair, of Virginia, Associate Justice of the Supreme Court.

William Blount, North Carolina, governor of the Territory
South of the Ohio.

David Brearley, New Jersey, judge of the United States dis-
trict court of his state.

Pierce Butler, South Carolina, Senator.

Daniel Carroll, Maryland, Representative.

George Cljoner, Pennsylvania, Representative.

William Few, Georgia, Senator.

Thomas Fitzsimons, Pennsylvania, Representative.

Nicholas Oilman, New Hampshire, Representative.

Nathaniel Gorham, Massachusetts, Supervisor of Federal Ex-
cise in Massachusetts.

THE PERSONNEL OF THE FIRST ADMINISTRATION 105

Alexander Hamilton, New York, Secretary of the Treasury.

William Samuel Johnson, Connecticut, Senator.

Rufus King, of Massachusetts, Senator from New York.

John Langdon, New Hampshire, Senator.

James Madison, Virginia, Representative.

Robert Morris, Pennsylvania, Senator.

William Paterson, New Jersey, Senator, and later Associate
Justice of the Supreme Court.

George Read, Delaware, Senator.

John Rutledge, South Carolina, Associate Justice of the
Supreme Court.

Roger Sherman, Connecticut, Representative.

George Washington, Virginia, President of the United States.

Hugh Williamson, North Carolina, Representative.

James Wilson, Pennsylvania, Associate Justice of the Supreme
Court.

Of the other members who, for one reason or another,
did not sign the Constitution, the following were also in
the new government, making thirty members of the Phila-
delphia convention in all :

Oliver Ellsworth of Connecticut, Senator.
Caleb Strong of Massachusetts, Senator.
Edmund Randolph, Virginia, Attorney-General.
Elbridge Gerry, Massachusetts, the only opponent of the Con-
stitution elected to office. Representative.

In other words, over one-half of the members of the Phila-
delphia Convention entered into the service of the govern-
ment which they had devised. It is safe to say that four-
fifths of the active, forceful leaders of the Convention helped
to realize, as a process of government, the paper Constitu-
tion which they had drafted.

Indeed, one may say with a high degree of truth that the
constitutional Convention, although it adjourned on Sep-
tember 17, 1787, never dissolved until the grea,t economic

106 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

measures which were necessary to make the Constitution a
hving instrument were fully realized. Though separated
during the contest over ratification, the leading members
were united in the labor of securing the approval of the
grand design. When the new government was set up, the
great majority of the active spirits met once more as mem-
bers of Congress, high officers, and judges, and in official
capacity gave reality to the words written down at Phila-
delphia. It is therefore a wholly false notion to regard the
constitution-making process as completed with the ratifica-
tion of the instrument.^

The government that began with the inauguration of

1 Incidentally this throws an important light on a minor point in the Economic
Interpretation of the Constitution in which it was assumed that a member of the
Convention who appeared upon the funding books of the new government was a
holder of securities at the time of the Convention, on the theory that very few of
them could have been in what Jefferson called the "corrupt squadron" dealing in
the funds of the government whose credit depended so much upon their labors.
The main point of the chapter in question was that the members of the Convention
were of the capitalistic rather than the agrarian interest, and whether they made
money out of the adoption of the Constitution was specifically stated to be of no
consequence to the main thesis (p. 73). Some superficial critics have imagined the
downfall of the whole thesis because it could not be definitely proved that all the
security-holding members held their paper at the time of the Convention. Such
critics have the satisfaction of choosing to believe that the framers who held public
funds were men who had risked their money in securities when the fortunes of the
government were at a low ebb before 1787, or that most of them were engaged in
buying securities while they were serving as legislative, executive, or judicial offi-
cers under the government which they had created, and at a time when their
influence was determining the value of those securities. Respect for the framers
of the Constitution should impel us to choose the former alternative. It is inform-
ing to compare the list of security holders in the Convention (p. 150 of the Eco-
nomic Interpretation) with the above list of members of the Convention who took
office in the first government under the Constitution. If the members who ap-
pear on the funding books of the new government did not hold their securities at
the time of the Convention, they must have bought them during those momentous
months when the funding measures were being pushed through Congress, and ade-
quate revenues provided and when every officer of the government high and low
knew what the effect of the laws would be on securities. The fact that wherever
the old treasury records of the Confederation are available the names of the security-
holding meml)ors of the Convention appear and the high character of the great
majority of them induce us to believe that they belonged to that large class of
bona fide creditors of the United States who had a moral right to expect full pay-
ment at the hand of the government.

THE PERSONNEL OF THE FIRST ADMINISTRATION 107

Washington, on April 30, 1789, was therefore no non- V
partisan government chosen without regard to the constitu-
tional conflict which had just closed. It was no indiscrimi-
nate group of men untrained in the meaning of that conflict
or uncertain as to the general policies that were to be pur-
sued under the Constitution. Differences of opinion there '
were, no doubt, for many differences of opinion had been
glossed over in the veiled language of the Constitution, but
that the new government was to restore public credit, es-
tablish adequate revenues, create a nation-wide judicial
system, pay the debt, strengthen the defences on land and
sea, and afford adequate support to trade and commerce
the members of the Convention who met again as members
of the federal government must have been reasonably^^
certain.

CHAPTER IV

THE CONSTITUTION IN OPERATION

The important measures of the new government, com-
posed as it was so largely of leading members from the
Philadelphia Convention, may be justly regarded as the first
fruits in the fulfilment of the promises of the Constitution.
The Senate was, as we have seen, practically controlled by
men who had helped to draft that instrument, and a num-
ber of significant bills, such as the measure creating the
federal judicial system, the Bank act, and the final amend-
Vment to the funding bill, originated in that chamber. The
executive department, so far as domestic affairs were con-
cerned, was likewise dominated by members of the Conven-
tion: Washington, Hamilton, and Randolph. And in-
terestingly enough, the House of Representatives, although
it did not embrace a very considerable proportion of former
Convention members, was, nevertheless, to a large extent
composed of men who held depreciated securities of the old
government or purchased them while engaged in placing
public credit on a firm foundation, for their names appear
N)n the first funding books of the new government.^

In gathering the fruits of the constitutional conflict, it
was hardly to be expected that the champions of the new
system could escape encountering a strong and vigilant
opposition. New fuel was heaped upon the fires of Anti-
Federahsm. Opposition to the Constitution could now be

» Below. Chap. VI.
108

THE • CONSTITUTION IN OPERATION 109

shifted to an antagonism to the measures for which the
Constitution stood. It is true that we are told by a careful
scholar of our day, Professor Libby, that parties did not
develop out of the measures managed in Congress by Hamil-
ton/ but over against his opinion we may set the high
authority of no less penetrating and competent contem-
porary observers than John Marshall and Thomas Jeffer-
son, to say nothing of a host of newspaper scribes and
pamphleteers, large and small. In his Life of Washington,
Marshall informs us that "the first regular and systematic
opposition to the principles on which the affairs of the union
were administered, originated in the measures which were
founded" on Hamilton's Report on Public Credit.^ And
speaking of the proposition relative to the Bank, he adds :
"This measure made a deep impression on many members
of the legislature ; and contributed not inconsiderably, to
the complete organization of those distinct and visible
parties, which, in their long and dubious conflict for power,
have since shaken the United States to their centre." ^

This same view of the origin of parties under the Consti-
tution is revealed in many places in Jefferson's writings.
Nevertheless, Professor Libby tells us that the fiscal measures
of Hamilton did not produce parties, citing in partial support
of his opinion the fact that Jefferson joined the Secretary
of the Treasury in securing the passage of the funding bill.*
This, says Professor Libby, the Secretary of State could not
have done if he had been the head of a political party rather
than of a mere faction. And it must be confessed that, at
first glance, this appears to be a very plausible explanation
of the assumption ''deal" — for such it truly was if we apply

1 Libby, op. cit., Vol. II, p. 217.

*Life of Washington (2d ed.), Vol. II, p. 181.'

» Ibid., p. 206.

* loc. cit, Vol. II, p. 217.

110 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

to it the language of contemporary politics — but there are
several collateral circumstances which should be taken into
account before the verdict is rendered.

In the first place, it must be called to mind that Jeffer-
son had been in France during the struggle over the forma-
tion and adoption of the Constitution and also during the
federal election contests which ensued. He had returned
to the country in 1789 after a long absence, and naturally
it required some time for him to analyze the political situa-
tion and discover the exact nature of the political divisions
which were already plaguing the new government. In the
second place, Jefferson, on his own confession, knew very
little about the impHcations of the funding bill, and at the
time it came up, he was apparently unaware of its relation

Nto the growing agrarian party. As soon as he came to
understand Hamilton's capitalistic system, Jefferson re-
gretted his action in the matter of the assumption of state
debts, for he wrote to Washington on September 2, 1792, as
follows : " I was duped into [helping Hamilton pass the fund-
ing bill] by the Secretary of the Treasury, and made a tool
for forwarding his schemes, not then sufficiently understood
by me ; and of all the errors of my political life, this has
occasioned me the deepest regret." ^

^Vhether Jefferson became opposed to Hamilton's fund-

' ing measures on principle, after a more deliberate examina-
tion, or merely found it expedient to set himself down as an
opponent later when he found out the temper of the country,
is of little importance except to the moral philosopher ; but
certain it is that he grounded his opposition and that of the
Anti-Federalists on the highly exceptionable features of
the Treasury program. In the letter to Washington, just
quoted, Jefferson continued : "That I have utterly, in my

» Works (Washington ed.), Vol. Ill, p. 460.

THE CONSTITUTION IN OPERATION 111

private conversations, disapproved of the system of the Secre-
tary of the Treasury, I acknowledge and avow ; and this was V,
not merely a speculative difference. His system flowed from
principles adverse to liberty, and was calculated to under-
mine and demolish the Republic, by creating an influence of
his department over the members of the Legislature. I saw
this influence actually produced, and its first fruits to be the
establishment of the great outhnes of his project by the
votes of the very persons who, having swallowed his bait,
were laying themselves out to profit by his plans ; and that
had these persons withdrawn, as those interested in a ques-
tion ever should, the vote of the disinterested majority was
clearly the reverse of what they made it. These were no j
longer the votes then of the representatives of the people,
but of deserters from the rights and interests of the people ;
and it was impossible to consider their decisions, which had
nothing in view but to enrich themselves, as the measures
of the fair majority, which ought always to be respected.
If what was actually doing begat uneasiness in those who
wished for virtuous government, what was further proposed
was not less threatening to the friends of the Constitution.
For, in a report on the subject of manufactures (still to be
acted upon), it was expressly assumed that the general
government has a right to exercise all the powers which
may be for the general luelfare, that is to say, all the legiti-
mate powers of government."

In the Anas, Jefferson enumerated the funding and Bank
measures and the control of the Treasury Department over
the members of the legislature as the reasons for his an-
tagonism to the administration. "Here then," he says,
"was the real ground of the opposition which was made to
the course of administration. Its object was to preserve

the legislature pure and independent of the executive, to

112 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

restrain the administration to republican forms and prin-
ciples, and not permit the constitution to be construed into
a monarchy, and to be warped, in practice, into all the
principles and pollutions of their favorite English model.
Nor was this an opposition to General Washington. . . .
He was not aware of the drift, or of the effect of Hamilton's
schemes.^ Unversed in financial projects and calculations
and budgets, his approbation of them was bottomed on his

^confidence in the man. But Hamilton was not only a
monarchist, but for a monarchy bottomed on corruption." ^

\ Jefferson's remedy for the evils introduced by the Federal-
ists was to establish the supremacy of the agricultural

^interest over the " stock jobbers." ^

In that long and confidential letter to Hamilton written
by Washington on July 29, 1792, in which are set forth
twenty-one propositions constituting the grounds of the
Anti-Federalist antagonism to the administration, it is clear
that the President was fully aware of the fact that Hamil-
ton's economic policies were the fundamental source of the
party cleavage.* If Washington had earlier entertained
any doubts on that point, he must have been fully satisfied
after the conference which he had with Jefferson on July 10,
1792, in which the latter based the complaints of the opposi-
tion wholly on the measures which had emanated from the
Treasury Department.^

In view of the abundant contemporary evidence, it is
not to be doubted that Hamilton's fiscal policy was the
recognized source of substantially all of the partisan op-
position to the government, which arose in Washington's

' See above, p. 66, as to the accuracy of this statement.
' Jefferson, Works (Washington ed.), Vol. IX, p. 95.
' Wrilinga (Ford ed.), Vol. V, p. 275.
* Wrilinga (Sparks rd.), Vol. X, p. 249.

'Jefferson, Works (Washington ed.), Vol. IX, p. 460. See also below, Chaps.
VII and VIII, for a more dotailod treatment of this proposition.

THE CONSTITUTION IN OPERATION 113

administrations.^ At all events, it will be admitted that
Hamilton was the intellectual leader of the Federalist
party during those administrations, that he had the most
systematic and penetrating mind of any one in the first
government, that his policies were the foundation of all the
important economic legislation of the period, and that all
of his proposals were based upon a carefully worked out
scheme of economics and politics. In getting at the prin-
ciples underlying Federalist policies and the partisan con-
flict which they produced, it is necessary, therefore, to
analyze the essential elements of Hamilton's political
economy.

Fortunately this is not a difficult task, for the measures
which he proposed are known to all and celebrated in the
annals of finance, and the economic basis of them all is
carefully explained in his famous reports.^ The measures
included :

(1) A funding of the entire, jifihtr- principal and interest,
at face^alue instead of on a basis of discrimination between
the original subscribers to the debt and the speculators and
secondary purchasers.'

> Some superficial writers deny that there was any connection between Hamil-
ton's fiscal measures and the issues at stake in the constitutional conflict. Some
have gone so far as to hold that Hamilton made his program out of whole
cloth and that it was not a part of the plans of the members of the Philadelphia
Convention. This cannot be admitted. That the details of the fiscal system of
the new government were all foreseen at Philadelphia will not be contended by
any one, but the untenable character of the view that Hamilton alone funded the
debt, or violated the principles of the Constitution by his measures becomes appar-
ent when we count the number of the members of the Philadelphia Convention who
were in the first Congress and voted for Hamilton's legislation. We must also
remember how many of the same members were loyal Federalists until the end.
The framers of the Constitution were indeed traitors to their own cause if they
voted for and supported laws that were not contemplated by the Constitution but
were in direct conflict with it.

2 To be found in Works of Alexander Hamilton (Lodge ed.). Vols. II and III, and
in American State Papers : Finance, Vol. I.

^ A part to draw six per cent at once, another part three per cent, and a third
part six per cent after the lapse of ten years.

114 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

(2) The assumption of the state debts by the national
government, on the basis of funding at face value, thus
immensely increasing the national debt.

(3) The establishment of a national bank, three-fourths
of whose stock was composed of subscriptions in~the rfe-
ceirtlyTun3edr'sIFpeF~cen^^ then bearing interest
and one-fourth in specie. It appears that only a small
part of the specie was actually paid in by the stockholders,
and^hat the bank stock was in fact based ^almost entirely
upon the funded governrnenrtT'securities which w^S^thus
given an additionalvalue and made Jhe partial -b^;srsTor an
issue ol bank notes to be loaned. The note issues were
limited to not more than $10,000,000 in excess of the de-
posits.

(4) The employment of the power to lay customs duties
in such a manner as to protect and encourage American
manufacture and commerce — those branches of American
enterprise most dependent for their activities upon an
ample supply of fluid capital. By the protection of American
manufacturing and commerce, furthermore, the demand for
fluid capital was to be increased and the value of the said
capital in the hands of the holders immensely improved.

(5) The disposal of the pubhc lands in large as well as
small quantities and the acceptance of public securities
bearing six per cent interest in payment therefor, as well as
goH-or silver.^

(6) Sinking fund provisions enabling the federal govern-
ment to assist the security holders in buoying up the
public credit by purchasing securities in the market from
time to time. In advocating this plan of partial debt

> State Papers: Public Lands, Vol. I, p. 8. Land speculators, like Robert Moms,
knew very well that a rise in the value of the funds meant a rise in land values, for
it released more capital for speculation. See Morris, Private Letter Book, Vol. It
p. 258, Library of Congress Mss.

THE CONSTITUTION IN OPERATION 115

redemption, Hamilton was under no delusion about a debt
paying itself. It was not designed to enable the govern-
ment to buy its debt at the lowest figure but to permit
government intervention to sustain the value of the public
stock, that is, to sustain the augmentation of fluid capital.
This purpose was distinctly avowed by Hamilton in a letter
to William Seton, whom he commissioned to buy on behalf
of the sinking fund. "A principal object with me," he
said, "is to keep the stock from falling too low in case the
embarrassments of the dealers should lead to sacrifices ;
whence you will infer that it is not my wish that the pur-
chases should be made below the prescribed limits, yet
if such should unfortunately be the state of the market, it
must of course govern." Not only did Hamilton use this
powerful engine to help maintain the value of public paper,
but he employed it also to help those operators in securi-
ties who were "bulling" the market. In the letter to
Seton, quoted above, he added a postscript: "If there are
any gentlemen who support the funds and others who
depress them, I shall be pleased that your purchases may
aid the former, — this in great confidence." ^

1 Works (Lodge ed.), Vol. VIII, p. 232. That Hamilton used the sinking fund
for the benefit of speculators was a common assertion of the opposition (see Tay-
lor's charge, below, p. 204), and it is in connection with this fund that the most
substantial indictments of the Secretary were made. At the time Hamilton wrote
the above letter, it was known and he himself knew that the leader among those
' ' supporting " the funds was the great speculator, William Duer, one of his closest per-
sonal friends. On the next day, August 17, 1791, Hamilton wrote to Duer cautioning
him against pushing public securities too high (Works, Vol. VIII, p. 233). Two
days later, August 19, Seton purchased for the government .$14,000 worth of de-
ferred securities from Duer, and on August 27, Seton purchased from him another
lot of deferred securities (.538, 6S5 worth) at 12/6 (State Papers: Finance, Vol. I,
p. 117). On August 6, 1791, deferred stock was at 13/11 and it showed a weak-
ness on the 10th and a further decline on the 13th (Ibid., p. 231). In August,
September, and October, 1791, heavy purchases were made for the sinking fvind
and by October 29, deferred stock was at 13/4. It then continued to rise steadily
until it reached 15/8 on January 25, 1792 (Ibid., p. 231). Shortly afterward,
Duer failed disastrously and landed in the debtors' prison whence he issued threats
to moneyed persons in New York promising unpleasant revelations and violence

116 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

V In other words, Hamilton's measures provided for under-
writing the depreciated and instable public securities at
face value by assuring payment of the interest and prin-
cipal by the federal government, and then for using about
one-eighth of them as the capital of a national bank — ■
empowered to issue notes. The bank notes were further
underwritten by the promise of the federal government
to receive them for all payments due that government.

\ The upshot of the whole procedure, from an economic
point of view, was the transformation of well-nigh worthless
public paper into substantial fluid capital to be employed
in commerce, manufacturing, and the development of
Western lands. It was not merely the payment of the
debt that Hamilton had in mind ; on the contrary the sharp

. stimulation of capitalism — banking, commerce, and manu-
factures — was an equally fundamental part of his system.
This augmentation of fluid capital by government fiat based
upon a promise to pay interest and principal at stipulated
periods was exactly the task to which Hamilton set himself,
and he constantly employed its advantage to the country

N^as an argument in support of his respective propositions.^

in case they refused help. The sinking fund provisions of the funding systena were
viewed by some of the opposition as mere engines for making fluctuations in securi-
ties for the benefit of the speculators. Senator Maclay so regarded them and ex-
pressed himself on the subject in the following manner: "It was originated and
passed after I left New York, and is certainly the most impudent transaction that
I ever knew in the political world. I regret my being absent when it passed. . . .
This nominal reduction is a virtual raising of the whole value of the debt. Some-
thing of this kind, I have heard, is common in England. When Governments
attempt a purchase of any kind of stock, the holders of that kind of stock never
fail to raise the residue. Hamilton must have known this well. Our speculators
or stockholders knew all this. They have a general communication with each
other. They are actuated by one spirit, or I should rather say by Hamilton.
Nobody (generally speaking) but them buys ; it is easy for them, by preconcert, to
settle what proposals they will give in ; and these being filed, the commissioners
are justified in taking the lowest." Maclay, Sketches, p. 271.

' Writing sometime afterward in defence of his fiscal policies, Hamilton dwelt
at length upon the advantages derived from the augmentation of fluid capital
through the proper funding of the debt. He said : "It was true that a large in-

THE CONSTITUTION IN OPERATION 117

In his very first Report on the Pubhc Credit, Hamilton
said: "The advantage to the pubhc creditors, from the
increased value of that part of their property which con-
stitutes the public debt, needs no explanation.

"But there is a consequence of this, less obvious, though
not less true, in which every other citizen is interested.
It is a well known fact, that, in countries in which the
national debt is properly funded, and an object of estab-
lished confidence, it answers most of the purposes of money.
Transfers of stock or public debt are there equivalent to
payments in specie ; or in other words, stock, in the prin-
cipal transactions of business, passes current as specie.
The same thing would, in all probability, happen here,
under the like circumstances.

"The benefits of this are various and obvious :

"First. Trade is extended by it, because there is a larger V
capital to carry it on, and the merchant can at the same
time, afford to trade for smaller profits ; as his stock which,
when unemployed, brings him in an interest from the ^
Government, serves him also as money when he has a call
for it in his commercial operations.

"Secondly. Agriculture and manufactures are also pro-
crease of active capital and augmentation of private fortunes would beget some ^
augmentation of expense among individuals and that a portion of this expense
would be laid out on foreign articles of luxury. But the proportion which this
employment of the new capital would bear to the part of it which would be employed
on useful and profitable objects would be, and has been inconsiderable. Whoever
will impartially look around will see that the great body of new capital created
[italics mine] by the stock has been employed in extending commerce, agriculture,
manufactures, and other improvements. Our own real navigation has been much
increased, our external commerce is carried on much more upon our own capitals *
than it was ; our marine insurances in a much greater proportion are made by
ourselves ; our manufactures are increased in number and carried on upon a larger
scale. Settlements of our waste land are progressing with more vigor than at any
former period. Our cities and towns are increasing rapidly by the addition of new
and better houses. Canals are opening, bridges are building with more spirit
and effect than was ever known at a former period. The value of lands has risen
everywhere." Works (Lodge ed.), Vol. VII, p. 404. V-

118 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

"vmoted by it, for the like reason, that more capital can be
commanded to be employed in both ; and because the
merchant whose enterprise in foreign trade gives to them
activity and extension, has greater means for enterprise.

" Thirdly. The interest of money will be lowered by it ;
for this is always in a ratio to the quantity of money, and
to the quickness of circulation. . . ." ^

In his Report on a National Bank, on December 13, 1790,
Hamilton adverted at length to the function of that institu-
^ tion in increasing the fluid capital of the country. First
among the advantages of a bank, he placed, "the augmen-
tation of the active or productive capital of a country.
Gold and silver, when they are employed merely as the
1 instruments of exchange and alienation, have been not
improperly denominated dead stock; but when deposited
in banks, to become the basis of a paper circulation, which
takes their character and place, as the signs or representa-
tives of value, they then acquire life, or in other words an
Vactive and productive quality. ... It is a well-established
fact* that banks in good credit can circulate a far greater
sum than the actual quantum of their capital in gold and
silver. The extent of the possible excess seems indeter-
minate ; though it has been conjecturedly stated at the
proportions of two and three to one. . . . The combina-
tion of a portion of the public debt in the formation of the
capital [of the Bank] is the principal thing of which an ex-
planation is requisite. The chief object of this is to enable
the creation [italics mine] of a capital sufficiently large to be
the basis of an extensive circulation, and an adequate se-
curity for it. As has been elsewhere remarked, the original
plan of the Bank of North America contemplated a capital
of ten milHons of dollars which is certainly not too broad a

> State Papers: Finance, Vol. I, p. 16.

THE CONSTITUTION IN OPERATION 119

foundation for the extensive operations to which a national
bank is destined. But to collect such a sum in this country,
in gold and silver, into one depository, may, without hesi-
tation, be pronounced impracticable. Hence the necessity
of an auxiliary, which the pubHc debt at once presents.

"This part of the fund will always be ready to come in
aid of the specie. . . . The quarter-yearly receipts of
interest will also be an actual addition to the specie fund,
during the intervals between them and the half-yearly
dividends of profits. The objection to combining land
with specie, resulting from their not being generally in
possession of the same persons, does not apply to the debt,
which will always be found in considerable quantity among
the moneyed and trading people.

"The debt composing part of the capital, besides its
collateral effect in enabHng the bank to extend its opera-
tions and consequently to enlarge its profits, will produce
a direct annual revenue of six per centum from the Govern-
ment, which will enter into the half-yearly dividends re-
ceived by the stockholders.

"When the present price of the pubhc debt is considered,
and the effect which its conversion into bank stock, incor-
porated with a specie fund, would, in all probability, have
to accelerate its rise to the proper point, it will easily be
discovered that the operation presents, in its outset, a very
considerable advantage to those who may become sub-
scribers; and from the influence which that rise would
have on the general mass of the debt, a proportional benefit
to all the public creditors, and in a sense which has been
more than once adverted to, to the community at large." ^

In his Report on Manufactures, in December, 1791,
Hamilton Ukewise discussed at length the place of fluid

1 Ibid., Vol. I, pp. 67, 75 passim.

120 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

vcapital in the development of commerce and industry. One
of the objections to a protective tariff, which he thought
worthy of considerable attention, was that the scarcity of
capital in the United States constituted a decided handicap
to American enterprise and made highly improbable a
profitable establishment of manufactures, even under
government protection. In the mouth of his opponent he
put the argument that when "a deficiency of pecuniary
capital" is added to a scarcity of hands and the dearness of
labor, "the prospect of a successful competition with the
manufactures of Europe, must be regarded as little less than

>idesperate." ^

This argument Hamilton then took into consideration at
length, although he beheved that "the supposed want of
capital for the prosecution of manufactures in the United
States is the most indefinite of the objections which are
usually opposed to it." '^ With great insight into economic
forces, he pointed out the difficulty of ascertaining the real
extent of the money capital of the country and the relation
of the quantity of money and the velocity of its circulation
■40 its efficiency in commercial operations. But he thought
it evident that the United States offered an immense field
for the advantageous employment of large masses of capital.

vOf that there could be no doubt.

The difficulties of securing capital, however, are by no
means insuperable: "It does not follow that there will
not be found, in one way or another, a sufficient fund for
the successful prosecution of any species of industry which
is likely to prove truly beneficial." Hamilton then enumer-

V ated the sources of this fund : "The introduction of banks
. . . has a powerful tendency to extend the active capital
of a country. Experience of the utility of these institu-

> Slate Papers: Finance, Vol. I, p. 123.
« Ibid., p. 130.

THE CONSTITUTION IN OPERATION 121

tions is multiplying them in the United States. . . . The
aid of foreign capital may safely, and with considerable
latitude, be taken into calculation. . . . The attraction of
foreign capital for the direct purpose of manufactures ought
not to be deemed a chimerical expectation."

Last but not least of the sources of capital for manufac-
turing was the national debt properly funded. This was
Hamilton's great rehance for the development of capital-
istic enterprise. It was more certain than foreign capital
or local banking, and, what was no less important, it was
in a large measure concentrated in the hands of that very
class whose support for the new government Hamilton was
most solicitous to obtain. It was a capital fund that was
not impersonal, but inhered in definitely ascertainable
groups of American society. Hamilton knew and had the
closest personal dealings, in public and private matters,
with its greatest holders.^ No wonder his interest in it
never flagged.

After citing local banks and foreign countries as sources \
for the supply of industrial capital, Hamilton concluded
with evident pleasure: "It is satisfactory to have good
grounds of assurance that there are domestic sources, of
themselves adequate to it. It happens that there is a *-
species of capital, actually existing in the United States,
which relieves from all inquietude, on the score of the want
of capital. This is the funded debt. The effect of a funded .
debt, as a species of capital, has been noticed upon a former
occasion; but a more particular elucidation of the point
seems to be required, by the stress which is here laid upon
it. . . . Public funds answer the purpose of capital from
the estimation in which they are usually held by moneyed
men ; and, consequently, from the ease and dispatch with

' For example, men like Thomaa Willing, Robert Morris, and William Duer. ^

122 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

which they can be turned into money. This capacity of
prompt convertibihty into money, causes a transfer of stock
to be, in a great number of cases, equivalent to a payment
in coin. . . . Hence in a sound and settled state of public
funds, a man possessed of a sum in them, can embrace any
scheme of business which offers, with as much confidence
as if he were possessed of an equal sum in coin." ^
V It requires no very subtle analysis to discover that the
immediate beneficiaries of these various proposals by the
Secretary of the Treasury were the holders of public securi-
ties and capitalists generally. A study of the Treasury
Books and the records of finance of the period indicates

I that the great capitalists were also large holders of public
securities. Furthermore, in those days, there was not the
sharp division between the capitalist and entrepreneur
which has since appeared, but the two functions were more
often exercised by the same person. The immediate bene-
ficiaries of Hamilton's plans were therefore the security-
holding capitalists who were quite generally merchants,

traders, shippers, and manufacturers. Incidentally the

> Op. cit., pp. 13(>-131. A fine illustration of Hamilton's plan for turning securi-
ties into manufacturing capital is afforded by the National Manufacturing Society
of New Jersey whose prospectus quotes his Report on Manufactures almost ver-
batim. The original incorporators were Elias Boudinot, Nicholas Low, William
Constable, William Duer, Philip Livingston, Blair M'Clenachan, Matthew M'Con-
nell and Herman Le Roy, all of whom were large holders of public funds and
many of whom were vigorous speculators in public securities. William Duer per-
haps the most famous, certainly the boldest operator of all, was chosen governor of
the Society in December, 1791. See the Gazette of the United States, September 10,
1791, and December 17, 1791. The following letter from Peter Colt to Hamilton
gives an insight into the way in which the industrial concern was financed by public
securities: "We have much to fear from the present state of the funds of the
[Manufacturing] society [New Jersey]. It is probable that the third payment which
falls due the 13th instant will be made wholly in the funded debt of the United
States, as well as the last which falls due the 13th July next, and that those payments
will be complcated only on ahmit one half of the original shares. Should this prove
to be the case, it must add greatly to our present embarrassment ; as the debt could
not be turned into money without great loss and it will be even difficult to obtain
money on the credit of those funds, in the different banks, sufficient for the ex-
penditures of this summer and fall." Hamilton Mss., May 7, 1793.

THE CONSTITUTION IN OPERATION

123

INDUSTRIAL STOCKS

BANK NOTES

BANK STOCK

CONSOLIDATED PUBLIC DEBT

TAXATION

A Diagram of Hamilton's Capitalistic Edifice

124 ECONOMIC ORIGINS OP JEFFERSONIAN DEMOCRACY

entrepreneur benefited by the facility for acquiring capital
on more advantageous terms, but inasmuch as the entre-
preneur was so commonly a capitalist as well, his benefits
were more direct than those of the farmer who likewise
derived advantage from the temporary ease which the
fiscal system made in the money market. However, the
debt-burdened agrarians who had fought the Constitution
to the bitter end, would have preferred the augmentation
of the fluid capital in the form of state emissions of paper
money, but that door was temporarily closed by a constitu-
tional prohibition that was not beaten down until the days of
the states rights Supreme Court under Chief Justice Taney.
This is no place to make any fine excursions into economic
theory for the purpose of discovering what substantial
wealth formed the foundation for this paper augmentation
of fluid capital, or of finding out whether the real property
owners were correct in their oft-repeated assertions that
land and labor paid for it all. The point which concerns
the historian is the existence of a widespread belief at the
time that fluid capital, in the form of a public debt used to
underwrite banking and capitalist enterprise, was a charge
upon the production of material commodities, and in the
United States, therefore, a charge principally upon agri-
culture. The existence of this belief is evident from the
debates in the House of Representatives over the funding
system, and it is finely illustrated in the resolutions of
protest to Congress by the legislature of Virginia against
the assumption of state debts, passed in December, 1790.^

« State Papers: Finance, Vol. I. p. 90; see below, Chap. VII. In this famous
set of resolutions, the Virginia legislature declared: "In an agricultural country
like this, therefore, to erect and concentrate and perpetuate a large moneyed inter-
est is a measure which your memorialists apprehend must, in the course of human
events, produce one or other of two evils ; the prostration of agriculture at the feet
of commerce, or a change in the present form of Federal Government fatal to the
existence of American liberty." Thus early in the contest, the Virginia legislature

THE CONSTITUTION IN OPERATION 125

Hamilton himself foresaw the rise of the agrarian interests
against his proposals. In his first Report on Public Credit,
he anticipated this, and sought to parry criticism from that
quarter by showing how agriculture was to become an in-
direct beneficiary from the augmentation of fluid capital.
"The effect which the funding of the public debt on right
principles would have upon landed property, is one of the
circumstances attending such an arrangement which has been
least adverted to, though it deserves the most particular
attention. The present depreciated state of that species of
property is a serious calamity. The value of cultivated
lands in most of the states has fallen, since the Revolution,
from twenty-five to fifty per cent. In those further south,
the decrease is still more considerable. Indeed, if the repre- '
sentations continually received from that quarter may be
credited, lands there will command no price which may not
be deemed an almost total sacrifice. This decrease in the
value of lands ought, in a great measure, to be_attributed_
to the scarcityof money ; consequently whatever produces
an augmentation of the moneyed capital of the country,
must have a proportional effect in raising that value. . . .
The proprietors of lands would not only feel the benefit of
this increase in the value of their property and of a more
prompt and better sale, when they had occasion to sell, t
but the necessity of selling would be itself greatly dimin-
ished. As the same cause would contribute to the facility
of loans, there is reason to believe that such of them as are
indebted, would be able, through that resource, to satisfy \
their more urgent creditors." ^

recognized the battle as one between capitalistic and agricultural interests and
frankly protested against the supremacy of the former which Hamilton's fiscal
policy promised. Virginia, it will be remembered, ratified the Constitution by a
very small majority in a gerrymandered convention. Economic Interpretation,
p. 235 ; Ambler, Sectionalism in Virginia, p. 58. ' Ibid., p. 16.

126 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

The antagonism between the landed and manufacturing
interests Hamilton sought to soften, on another occasion,
by declaring it to be both unfounded and mischievous.
In his Report on Manufactures in December, 1791, after
the big battle over funding and assumption had been
fought and won, he took up this alleged clash of interests.
He there adverted to the fact that it was not uncommon
to encounter the opinion that the promotion of manufactures
redounded to the benefit of the North at the expense of the
VSouth. The Northern states had been called manufacturing
and the Southern states agricultural, and " a species of opposi-
tion is imagined to subsist between the manufacturing and
agricultural interests." While quick to admit that the en-
couragement of some manufactures might be detrimental to
agricultural states, Hamilton declared that, taking industries
in the aggregate, there was in fact an intimate connection
between manufacturing and agricultural prosperity.^

The principle upon which he based this mutuality of in-
terests was the ancient maxim that whatever benefits one
section of the community is bound in the long run to benefit
V vail sections. "Ideas of a contrariety of interests between
the Northern and Southern regions of the Union, are, in
the main, as unfounded as they are mischievous. The
diversity of circumstances on which such contrariety is
usually predicated, authorizes a directly contrary con-
clusion. Mutual wants constitute one of the strongest
X links of political connection ; and the extent of these bears
a natural proportion to the diversity in the means of mutual

• Hamilton did not rely upon mere anticipatory arguments to parry such thrusts
as that which came from the Virginia legislature. When the resolutions in question
reached him, he transmitted copies to Chief Justice Jay with the pertinent query :
"Ought not the collective weight of the different parts of the Government be em-
ployed in exploding the principles they contain?" Correspondence and Public
Papers of Jay, Vol. III. p. 405. This is an interesting passage in the history of
"the separation of powers."

THE CONSTITUTION IN OPERATION 127

supply. Suggestions of an opposite complexion are ever to
be deplored, as unfriendly to the steady pursuit of one great '
common cause, and to the perfect harmony of all the parts, v^.
In proportion as the mind is accustomed to trace the in-
timate connexion of interest which subsists between all
the parts of a society, united under the same government,
the infinite variety of channels which serve to circulate the )
prosperity of each, to and through the rest — in that pro-
portion will it be little apt to be disturbed by solicitudes
and apprehensions, which originate in local discriminations."^ \

There was still another source of antagonism between
the capitalistic and agrarian interests which Hamilton
thought worthy of consideration ; that was the competition
between them for labor supply. "A scarcity of hands for V
manufacturing occupation and a dearness of labor gener-
ally," were cited by him as being among the objections
urged against the development of industries in the United
States. The force of this argument compelled him to seek
new sources of labor supply not in competition with
that already drawn upon by agriculture. One new source
would be persons now idle and disqualified and indisposed
for the toils of the country ; and another source would be ^
women and also children "of a tender age," if the example
of Great Britain was followed. But the chief source of the
new labor supply was to be foreign immigration. "Who-
ever inspects with a careful eye, the composition of our
towns will be made sensible to what an extent this resource
may be relied upon. This exhibits a large proportion of
ingenious and valuable workmen, in different arts and
trades, who, by expatriating from Europe, have improved
their own condition and added to the industry and wealth
of the United States." The natural inference is, he con-V

1 State Papers: Finance, Vol. I, p. 134.

128 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

eluded, that with the increasing demand in industries, a
bountiful supply of immigrants will follow.^

>^ Without questioning the validity of the claim that all
sections of the country and all classes of society participated

, in the benefits of that augmentation of fluid capital which
Hamilton's measures secured, it cannot be gainsaid that
the immediate beneficiaries of his fiscal policy were the

Vsecurity holders and the capitalistic-entrepreneurs. This
Hamilton frankly acknowledged in the Reports just cited,
although, of course, he declined to put them in antagonism
to the agrarian sections of the population. It seems cor-
rect, therefore, to place the beneficiaries of the new fiscal
system in the following order :

1 . Direct beneficiaries : security-holding capitalists.

2. Indirect beneficiaries : trading, commercial, and manu-
facturing entrepreneurs in need of capital.

3. Incidental beneficiaries : land-owning farmers.

^ As to Hamilton's solicitude for the first group there can
be no doubt. The justice of their claims he eloquently
pleaded on all appropriate occasions, and the necessity of
drawing their support to the new government was ever
present in the foreground or the background of his argu-
ments. His first great Report dealt, of course, with their
interests and the ways and means of meeting them. In
establishing the national bank he planned for such an
extensive use of the public debt that a decided advantage
was certain to accrue to the holders of securities ; and in
his Report on Manufactures he explained at length how
the development of industries would create a demand for
the employment of the debt for the double purpose of capital
and securities. To his belief in the justice of their claims,
he added the knowledge that they had "had a considerable

« state Papers: Finance, Vol. I, pp. 126 ff.

THE CONSTITUTION IN OPERATION 129

agency in promoting the adoption of the new Constitution," 'i
and could be counted upon as pillars of the new system.^ V

That Hamilton was equally concerned with the develop-
ment of manufacturing in the United States there can like-
wise be no doubt. On account of his connections, his sym- V
pathies, his interests, and his notions of political economy he
looked upon the advancement of industries as a necessary
part of national greatness. This was no academic theory
with him. He put his convictions to practical test by be- |
coming a leading adviser and director in the Paterson manu-
facturing concerns which were built upon capital derived
from the public debt. In public and in private life he con-
sistently favored the encouragement and protection of
American industrial interests.^

Yet it would be a mistake to assume that Hamilton's

> Works (Lodge ed.). Vol. VII, p. 418.

* See Hamilton Mss., Library of Congress, under date of October 3, 1792, and
passim, correspondence relative to his manufacturing connections. In prepar-
ing his Report on Manufactures, Hamilton was not dealing with abstractions. He
had carefully consulted his friends in all parts of the country and had received
reports on the nature and location of the various industries which needed protec-
tion and encouragement. These reports, which are of high economic and politi-
cal significance, are preserved in the Hamilton Mss., Library of Congress. For the
reports on Killingworth, Connecticut, see September 14, 1791 ; on New London,
September 14, 1791 ; Southington, September 14 and 21, 1791 ; Stonington, Septem-
ber 15, 1791 ; Winsor, September 16, 1791 ; Stamford, September 16, 1791 ; Farm-
ington, September 27, 1791 ; Lebanon, September 29, 1791 ; Montville, September
6, 1791 ; Suffield, September 12, 1791 ; Danbury, September 12, 1791. It is not
without significance that all these Connecticut towns needing protection, except
SuflBeld and Lebanon, were Federalist towns at the time of the ratification of the
Constitution (Economic Interpretation, p. 265). For the report from Charleston,
South Carolina, October 3, 1791 ; Wilmington, Delaware, November 28, 1791 ; Nor-
folk, Virginia, September 28, 1791 ; Richmond, October 4 and 8, 1791 ; Beverly,
Massachusetts, September 6, 1791. Consult Hamilton Mss. for the summer and
autumn of 1791. The way Hamilton's agents scoured the country for manufactures
to protect is illustrated by the following letter to him from D. Stevens of South Caro-
lina: "Agreeable to your request have wrote a circular letter to the most leading
characters throughout the state relative to the manufactures that may be carried
on in the several counties, — as yet have only two letters on the subject, one con-
tains some small sample of the cotton and linen manufacture carried on in families
for their own wear — as any others come to hand I will transmit them to you, and
shall shortly give you some account of what manufactures are carried on in
Charleston." Hamilton Msa., September 3, 1791.

130 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

interest was in economics rather than in political economy.

Mn all his public and private papers it is abundantly evident
that he was deeply aware of the relation between the bene-
ficiaries of his fiscal system and the stability, credit, and
permanence of the federal government. In his first Re-
port on Pubhc Credit, he declared that one of the purposes
of a properly estabhshed fiscal system was "to cement more

* closely the union of the States." In support of the pro-
posal to assume state debts he said: "If all the pubhc
creditors receive their dues from one source, distributed
with an equal hand, their interests will be the same. And,
having the same interests, they will unite in support of the
fiscal arrangements of the Government. . . . These cir-
cumstances combined, will ensure to the revenue laws a

'^more ready and more satisfactory execution."^ In his
elaborate defence of the funding system which he prepared

^but did not pubhsh, Hamilton explained that the improper
adjustment of the debt would have been "a severe blow to
the security of property," and have alienated from the federal

* government both the public creditors who had so ardently
aided in its establishment, and also allied property interests
which formed a no less secure bulwark for the national

V system.^

» State Papers: Finance, Vol. I, p. 18.

» Works (Lodge ed.), Vol. VII, pp. 417-419. This was the accepted view of the
best informed Federalists. Writing from New York, on March 27, 1790, to his
father in Litchfield, Connecticut, Oliver Wolcott, Jr., voicing what was doubtless
the sentiment of the Secretary of the Treasury, said : "I can consider the funding
system as important, in no other respect than as an engine of government. The
only question is what that engine shall be. The influence of a clergy, nobility and
armies, are and ought to be out of the question in this country ; but unless some
active principle of the human mind can be interested in the support of the govern-
ment, no civil establishments can be formed, which will not appear like useless and
expensive pageants, and by their unpopularity weaken the government which they
are intended to support. . . . Duties on most of the articles imported, ought to
be imposed from political considerations, even though the money were to be buried.
If the money is paid in such a manner as to interest the people in the government,
and at the same time not corrupt their integrity, the circulation of the revenue

THE CONSTITUTION IN OPERATION 131

Surely no further evidence is required to prove that v ^
Hamilton's measures were primarily capitalistic in charac-
ter as opposed to agrarian and that they constituted a
distinct bid to the financial, commercial, and manufacturing \

classes to give their confidence and support to the govern-
ment in return for a policy well calculated to advance their (
interests. He knew that the government could not stand **
if its sole basis was the platonic support of genial well-
wishers. He knew that it had been created in response to ^
interested demands and not out of any fine-spun theories ^
of political science. Therein he displayed that penetratingV •■
wisdom which placed him among the great statesmen of
all time.

answers a good purpose. . . . For these reasons, I think the state debts ought to
be assumed, as without assumption, the political purposes which I have enumer-
ated, cannot be attained." Gibbs, op. cit., Vol. I, p. 43. On February 10, 1790,
James Jarvis wrote to Hamilton: "In your report of the 9th January last, there
appear two great and predominant principles — namely the preservation of the
public faith inviolate and the creation to the community of the United States of
America, of a powerful and active representation of their agriculture, commerce
and manufactures. ... It becomes good policy to strengthen the executive arm
and which cannot be effected by any means so certain and gently diffusive as that
of collecting sufficient revenue. Hence the impolicy of paying the principal of the
national debts, beyond that certain point, which, not burthensome, becomes a stim-
ulant to industry and commerce, and a gentle compulsion to the citizens of a coun-
try to pay that homage and respect to government which is really necessary to its
existence." Hamilton Mss., February 10, 1790.

CHAPTER V

Hamilton's system before congress

The first session of the Congress of the United States
under the Constitution was devoted principally to the
problems of immediate revenues and administrative and
judicial organization. When the Representatives assembled
for the second session on January 4, 1790, Hamilton's first
Report on the Public Credit was about ready for publica-
tion, and five days later the Secretary announced that he
would present it whenever the House was prepared to re-
ceive it. Hamilton was anxious to appear in person before
that honorable body to read his Report and defend it, but
to his great disappointment he was compelled to communi-
cate it in writing. On January 14, the document was laid
before the House, and after a fortnight's delay it was taken
up for consideration.

On that day there was outstanding against the United
States and the several commonwealths within the Union a
total domestic debt of something like $60,000,000 ^ — an
amount equal in many states to the total value of all the
money on hand and at interest.^ The holders of this paper,
particularly of the continental securities, were anxiously
looking to the new government for a funding arrangement
that would meet all public obligations at their nominal or

> And a foreign debt of about $10,000,000.

* For Mercer's comparative estimate, see below, p. 220 ; Economic Interpreta-
tion of the Constitution, p. 36.

132

HAMILTON'S SYSTEM BEFORE CONGRESS 133

face value. A considerable portion of this paper — in some
states certainly from one-half to three-fourths — had passed
from the hands of the original possessors at rates ranging
from one-twentieth to one-sixth of its face value. The
demand of those who had originally risked their money and
of the speculators for immediate action on the part of the
federal government was so great that the funding operation
could not be long postponed.

When the members of Congress took up Hamilton's V
Report on Public Credit, they found proposed no mere
device for the payment of the debts of the United States,
but a complete funding system, contemplating a certain
degree of permanency in the debt, and above all the utiliza-
tion of it to increase the fluid capital of the country for the
purpose of promoting trade, manufactures, operations in
finance, and agriculture. Those representing the financial,
commercial, and industrial interests looked upon the pro- \
posal with favor at once, and the representatives of the
agricultural interest as quickly came to view the whole
scheme as a burden thrown upon land and labor. The
latter saw that actual capital could not be increased by a
fiat of the government and they believed that the fluid
capital which Hamilton's fiscal system was to call into being
was merely a claim to the fruits of toil on the land, vested
by legal action in th^ hands of the capitalistic classes and
realized through taxation.

The opposition, led by Jackson, of Georgia, sought at
once to secure delay. The members of this group believed
that the people would repudiate the plan if it was laid
before them and full opportunity given to discuss it in the
regions away from the great cities. The champions of im-
mediate action were, in fact, afraid that a serious delay in
funding the debt might end in complete failure, so great

134 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

was the ill-temper in the country against it.^ The specula-
tors in New York City filled the galleries, and Sedgwick, a
Representative and a security holder from Massachusetts,
exclaimed that "the ardent expectations of the people on
this subject want no other demonstration than the numer-
ous body of citizens assembled within these walls." ^ The
party of quick and decisive action carried the day, and the
debates on public credit proceeded with great vigor and
prolixity.

In order to ascertain the economic principles upon which
the opposition in Congress was based it is necessary to ex-
amine these debates in the House of Representatives on
the various aspects of the funding measures.^ The pages

> Fisher Ames, a Massachusetts Representative and a security holder, was
specially anxious about the funding process. He evidently thought that if it was
delayed, the popular feeling against it would defeat assumption altogether, and he
believed that the government would not last long unless the public credit was
properly established. In a letter dated May 20, 1790, he wrote: "The success of
it [assumption] would be certain if the Pennsylvania creditors were well disposed
towards it. . . . I am surprised that men, who are to depend on government
should be careless as to arguments, which seem to prove how much its strength will
be impaired by a divided revenue system. They seem to be secure as to the per-
manency of the government, and mindful of nothing but the property of the debt.
I hope we shall not finish the session without funding the whole debt ; if not the
whole, then as much as we can. For if we should not fund at all, I am apprehensive
that the popular torrent, at a future session, would be found to be strong against fund-
ing. . . . Without a firm basis for public credit, I can scarcely expect the government
will last long." The Life and Works of Fisher Ames, Vol. I, p. 78. Izard of South
Carolina somewhat sharply informed Jefferson in the spring of 17S9, shortly be-
fore he set out for New York to take his place in the first Senate that he hoped no
time would be wasted discussing amendments. "By whatever appellation therefore
Gentlemen may choose to be distinguished, whether by federal or anti-federal, I
hope we shall not be wasting time with idle discussions about amendments of the
Constitution ; but that we shall go to work immediately about the finances, and
endeavour to extricate ourselves from our present embarrassed and disgraceful
situation." Documentary History of the Constitution, Vol. V, p. 170.

' Annals of Congress, Vol. I, p. 1135. The reporter notes that the galleries were
unusually crowded.

' The Senate, as is well known, sat behind closed doors and we therefore have no
official record of the debates in that body. The Republicans attacked the Feder-
alists for the secrecy with which the latter surrounded their proceedings, especially
in the Senate. One of the best ways of establishing popular control over the govern-
ment, said John Taylor, the belligerent pamphleteer from Virginia, was to open

HAMILTON'S SYSTEM BEFORE CONGRESS 135

which follow are devoted to an outline of the reasoning
employed, particularly by the opposition, so far as it relates
to the underlying economic doctrines thrown into relief by
the conflict. To tell again the general history of the period
is no part of the purpose of this study ; that has been done
often and well. We are here concerned only with the
economic motives which were avowedly brought into play
in the political struggle.

The Report of the Secretary of the Treasury came before
the House for consideration in the committee of the whole
on Monday, February 8, and the battle royal was on at
once. Mr. Smith, a large security holder from Charleston,
South Carolina, brought the general poHcy of the adminis-
tration group to a concrete form in the shape of a series of
resolutions to the effect that Congress ought not to adjourn
without making adequate provision for the pubUc debt,
that no discrimination should be made between the original
holders and the assignees, that the state debts incurred
during the war should be assumed by the general govern-
ment, that the arrearages of interest on the state and con-
tinental debt ought to be funded and consolidated with the
principal, and that a certain rate of interest, to be decided
upon, should be paid for the time being. Another set of
resolutions, in the same tenor, but embodying more spe-
cifically Hamilton's propositions, was shortly afterward
brought forward by Mr. Fitzsimons, of Philadelphia, a

their doors, "to subject their legislative discussions to the free and common audi-
ence of every citizen, and to promote the free and rapid circulation of the news-
papers. But has this been done ? On the contrary, have we not seen with amaze-
ment, one branch of the legislature, withdraw itself into a sequestered chamber, and
shut its doors upon its constituents, still guarding them with obstinate persever-
ance, although more than one half of the union have required that they be opened?
Have we not likewise seen the free circulation of the newspapers clogged with taxes
which amount almost to a prohibition? Are these things the mere effect of acci-
dent, or are they the results of cool deliberation? contemplating objects dreadful to
this country." John Taylor, An Examination of the Late Proceedings in Con-
gress, etc. (1793).

136 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

security holder and former member of the constitutional
Convention.^

It is perfectly clear from the debates which ensued that
those who favored funding at face value and the assumption
of state debts by the national government understood that
not only would the security holders benefit by the direct
appreciation of their paper, but that the fluid capital of
the country would be immensely augmented to the ad-
vantage of all industrial and commercial enterprises. Gerry
adverted to this fact early in the debates over the public
credit, saying "It has been thought, that a pubUc debt is a
source of great emolument to a nation, by extending its
capital, and enlarging the operations of productive in-
dustry. ... In the contest [with France], Great Britain
increased her national debt to an astonishing degree ; and
when all Europe expected to see her sink beneath the burthen,
she stood firm and fixed as ever, with an increase of strength.
The influx of specie, after the peace, to purchase into her
funds, furnished the means for the expansion of her com-
merce and manufactures, and rather made the revolution
an advantage than a disadvantage to her." ^

The debate had not gone far before Hamilton's whole
theory that a large funded debt, an extensive augmentation
of fluid capital, and the stimulation of industries, meant a
diff"usion of prosperity throughout the nation was warmly
attacked by his opponents. Jackson, of Georgia, who seems
to have held no securities himself and represented a state
whose citizens held little of the public funds,' took the view
that a large national debt simply implied the purchase of
prosperity at the expense of the taxpayer and future genera-
tions. "Gentlemen may come forward, perhaps, and tell

* Annals of Congress, Vol. I, pp. 1170 and 1178.

» Ibid., Vol. I, p. 1137. » See below, p. 193.

HAMILTON'S SYSTEM BEFORE CONGRESS 137

me," he said, "that funding the pubHc debt will increase
the circulating medium of the country, by means of its
transferable quality ; but this is denied by the best informed
men. The funding of the debt will occasion enormous V
taxes for the payment of the interest. These taxes will
bear heavily both on agriculture and commerce. It will
be charging the active and industrious citizen, who pays
his share of the taxes, to pay the indolent and idle creditor
who receives them, to be spent and wasted in the course of
the year, without any hope of future reproduction ; for the
new capital which they acquire must have existed in the *
country before, and must have been employed, as all capitals
are, in maintaining productive labor. Thus the honest,
hard working part of the community will promote the ease
and luxury of men of wealth ; such a system may benefit
large cities, like Philadelphia and New York, but the re-
mote parts of the continent will not feel the invigorating
warmth of the American treasury ; in the proportion that
it benefits one, it will depress another. . . . Let us en-V
deavor to discover whether there is an absolute necessity
for adopting a funding system or not. If there is no such
necessity, a short time will make it apparent ; and let it be
remembered what funds the United States possess in the
Western Territory. The disposal of those lands may per-
haps supersede the necessity of estabUshing a permanent
system of taxation." ^

Later in the debate, Jackson denied that a funded debt
could be of great advantage to a nation and cited the ex-
ample of England. "Government stock," he said, "can
never be considered as cash. The stock employed in agri-
culture, commerce, and manufactures may, by great pros-
pects of advantage, be diverted into the hands of brokers,

1 Annals of Congress, Vol. I, p. 1181.

138 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

for the purpose of speculating further in the funds ; hut no
real addition will be made to the means of productive industry,
nor was anything of this kind contemplated at the time

V funding was first introduced into England." ^ This was
the main point of the opposition ; namely, that, while
claims to property might be augmented in the hands of
individuals by the inflation of capital, real wealth, which
was the product of land and labor, could not be increased

^thereby.

Hamilton's theory that the support of the public creditors
was necessary to the strength of the new government was
also brought up and contested by Jackson. "We learn
from Blackstone," he said, "that the reason for estabhshing
a national debt, was in order to support a system of foreign
politics, and to establish the new succession at the Revolu-
tion ; because it was deemed expedient to create a new
interest, called the moneyed interest, in favor of the Prince
of Orange, in opposition to the landed interest, which was
supposed to be generally in favor of the King, who had
abdicated the throne. I hope there is no such reason exist-
ing here ; our Government, I trust, is firmly established
without the assistance of stockjobbers. We ought to reign
universally in the hearts of our fellow citizens, on account
of the salutary tendency of our measures to promote the
general welfare, and not depend upon the support of a
party, who have no other cause to esteem us but because
we realize their golden dreams of unlooked for success." ^

In attacking the whole process of capitalistic inflation
and expansion, the opponents of Hamilton's system con-
tended that a very large proportion of the debt which he
proposed to fund at face value was represented no value
received by the government from the holders of the certifi-

> Annals of Congress, Vol. I, p. 1214. » Ibid., Vol. I, p. 1214.

HAMILTON'S SYSTEM BEFORE CONGRESS 139

cates and was so understood by the holders as well as the
public. From this point of view, the Federalists were
inflating paper that was largely fictitious when issued, and
thus increasing gratuitously the burden laid on " land and
labor."

The case of those who contended that the continental
debt was largely fictitious was put most effectively and
succinctly, perhaps, by Livermore, of New Hampshire, in
the House of Representatives, on February 9, 1790. He
opened by pointing out the grave injustice which would be
done by funding the foreign loans, from which the United
States had received hard money, on the same basis as the
domestic debt which represented 'a little real money and
much depreciated paper. "There is a great difference," ^
he said, "between the merits of that debt which was lent
the United States in real coin, by disinterested persons,
not concerned or benefited by the revolution, and at a
low rate of interest, and those debts which have been ac- i
cumulating upon the United States, at the rate of six per
cent interest, and which were not incurred for efficient
money lent, but for depreciated paper, or services done at
exorbitant rates, or for goods or provisions supplied at
more than their real worth, by those who received all the
benefits arising from our change of condition. ... It is V
very well known, — that those who sold goods or provisions
for this circulating medium [loan office certificates], raised
their prices from six to ten shillings at least. . . . There is
as much reason thai we should now consider these public
securities in a depreciated state, as every holder of them has
considered them from that time to this. There was a
period at which they were considered of no greater value
than three or four shillings in the pound ; at this day they
are not at more than eight or ten. If this, then, is the case,

140 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

NAvhy should Congress put it upon the same footing as the
foreign debt, for which they have received a hard dollar for

\ every dollar they engaged to pay? Could any possible
wrong be done to those who hold the domestic debt, by
V estimating it at its current value?" ^

But it had been argued that some part of the domestic
debt had been incurred by loans of hard money. "There
might be a small part lent in this way," the speaker con-
ceded, "but it was very small indeed, comparable with
the whole of the domestic debt. It is in the memory of
every gentleman, that, before the beginning of the revolu-
tion, every state issued paper money ; it answered the
exigencies of government in a considerable degree. The
United States issued a currency of the same nature, which
answered their purposes, except in some particular cases,
and these were effected by loans of certain sums of hard
money. If any distinctions are to be made among the
domestic creditors, it ought to be made in favor of such
only, and that in consequence of the origin of the debt ;
while the great mass given for the depreciated paper, or
provisions sold at double prices, ought to be liquidated at
its real value. ... It is well known, that a large propor-
tion of this domestic debt was incurred for paper-money
lent. To be sure Congress acknowledged its value equal
to its name ; but this was done on a principle of policy, in
order to prevent the rapid depreciation that was taking
Vplace. But money lent in this depreciated and depreciating
state, can hardly be said to be lent from a spirit of patriot-
ism ; it was a mere speculation in public securities. They
hoped, by putting their money in the loan office, though in a

' Livermore, however, called attention to the special position held by the regu-
lar continental certificates which Congress had put on a different footing and made
transferable. These, the speaker admitted, were hardly susceptible of discrimi-
natioD.

HAMILTON'S SYSTEM BEFORE CONGRESS 141

depreciated state, to receive hard money for it by and by. j
I flatter myself this prediction will never be effected." ^ v

It is unfair to assume that any considerable portion of \
the Anti-Fed eraHsts who resisted the estabhshment of ■ \-,i )}
Hamilton's fiscal system desired a repudiation of the debt.^ > -^
The most radical merely proposed to scale down the debt *
to something like its real value and thus materially reduce
the burden of the taxpayers. The majority of them were
just as anxious as the Secretary of the Treasury to do
"exact justice" to the pubhc creditors. Their notion of \
exact justice was not, however, to pay the existing security
holders at face value and leave unrecognized the claims of
those who, through a necessity created by the negligence of
the government, had been compelled to part with their
original certificates. In other words, they were looking
primarily toward the just discharge of the debt, not the
augmentation of the fluid capital in the hands of the exist-
ing holders who were largely concentrated in the cities.
They, therefore, proposed a "discrimination" between the
original holders and the secondary or speculative purchasers,
little knowing, probably, how many of the latter there were
in Congress.

1 Annals of Congress, Vol. I, p. 1185.

* The two proposals of those who opposed funding at face value the certificates
in the hands of all holders are thus summed up by Callender : "When the business
came originally before the Congress of 1789, three different plans were suggested.
The first proposed a new settlement of accounts, and aimed to annihilate the largest
part of the debt. But the new constitution had been, in a great measure, estab-
lished by the influence and activity of traders in these certificates. They and their
friends were superior in the legislature, and this scheme was rejected by a numerous
majority. A second proposal went on the ground of paying to the purchasers only
the real value which they had given for the certificates, and to give the difference
between the half crown which they had disbursed and the twenty shillings which
they claimed to the original holders. Thus when William Smith [M. C] demanded
five hundred dollars as the arrears due to an old sergeant the reply might have
run : 'You gave fifty dollars of money for these five hundred of paper. Here take
your fifty silver dollars back again. We shall reserve the remaining four hundred
and fifty for the man who shed his blood earning them.' The plan, also, was
negatived." Callender, Sedgwick & Co., or a Key to the Six Per Cent Cabinet (179S).

142 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

The most reasoned and effective argument for discrimina-
* tion was made by James Madison, who did not hold any
securities himself and was able to take a dispassionate view
of the merits of the several claims against the United States.
He freely admitted the sacredness of the duty laid upon
the government to pay the value which it had received with
lawful interest, but he held that there was one point at issue
which they could with propriety discuss, namely, to whom
the payment should be made. For the purpose of examin-
ing this question he classified the creditors into four groups :
original creditors who had never sold their paper, original
creditors who had alienated their securities, present holders
of alienated securities, and intermediate holders through
whose hand securities had passed. The merits of these
respective claimants he then analyzed at length.

As to the first group, the original holders who had not
alienated, he said, "there can be no difficulty. Justice
is in their favor, for they have advanced the value which
they claim ; public faith is in their favor, for the written
promise is in their hands ; respect for public credit is in
their favor, for if claims so sacred are violated, all confidence
must be at an end ; public opinion is in their favor, for every
honest citizen cannot but be their advocate. With respect
to the last class, the intermediate holders, their pretensions,
if they have any, would lead us into a labyrinth, for which
it is impossible to find a clue. This will be the less com-
plained of, because this class were perfectly free, both in
becoming and ceasing to be creditors ; and because, in
general, they must have gained by their speculations." ^

For the two remaining groups of creditors, original
holders who had alienated and the present holders who had
purchased, much might be said. The former might well

' Annala of Congress, Vol. I, p. 1235.

HAMILTON'S SYSTEM BEFORE CONGRESS 143

appeal to justice and public faith, for they had furnished
values to the government and had been compelled by the
policy of the government to sacrifice their property. More-
over the soldiers might appeal on grounds of humanity,
"for the sufferings of the military part of the creditors can
never be forgotten, while sympathy is an American virtue.
To say nothing of the singular hardship, in so many mouths,
of requiring those who have lost four-fifths or seven-eighths
of their due, to contribute the remainder in favor of those
who have gained in the contrary proportion."

On the other hand, continued Madison, the holders who
had purchased securities had claims which could not be
denied. The gains which they might make were the due
rewards of the risks they had taken ; they held the govern-
ment's solemn obligation to pay; and they could point
with reason to the truth of the statement that the literal
fulfilment of engagements is the best foundation of public
credit. Justice required that the original holders who
had sacrificed their securities should be paid for the loss
which the policy of the government had entailed upon
them; and public credit required the discharge of the
debt whose evidences lay in the hands of those who had
purchased for speculation. To pay both was beyond the
ability of the government, and, moreover, that would be
in excess of the value actually received by the public
treasury.

In this dilemma, Madison came to the conclusion that
" a composition, then, is the only expedient that remains ;
let it be a liberal one in favor of the present holders, let
them have the highest price which has prevailed in the
market ; and let the residue belong to the original sufferers.
This will not do perfect justice ; but it will do more real
justice, and perform more of the public faith, than any

144 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

other expedient proposed. The present holders, where
they have purchased at the lowest price of the securities,
will have a profit that cannot be reasonably complained of ;
where they have purchased at a higher price, the profit
will be considerable ; and even the few who have purchased
at the highest price cannot well be losers, with a well-funded
interest of 6 per cent. The original sufferers will not be
fully indemnified ; but they will receive, from their country,
a tribute due to their merits, which, if it does not entirely
heal their wounds, will assuage the pain of them."

The most effective reply to Madison's proposals was
made by Boudinot, of New Jersey, a security holder, who
said by way of preface that he felt disinterested in the
matter.^ The speaker refused to concede that there was a
fundamental difference between the original creditors and
those who had acquired alienated securities. "I am will-
ing to risk my reputation," he said, "that you will find the
greatest part of the debt in the hands of those who never
were real creditors of the United States. The original
creditors, I take it, are those who actually loaned the money,
furnished the supplies, or rendered the service ; the con-
tract was made with them. . . . Congress, in order to
benefit those- persons, whom they could not immediately
pay off, gave to them an evidence of the debt, to which was
annexed a negotiable quality. Hence the contract was
formed upon the idea of the transferable quality of the
certificate to be issued. The original creditor having, then,
alienated his debt, under these circumstances, conveyed
all his right and title thereto, under the sanction of the
government ; the transferee is, therefore, ipso facto, the
original creditor. This will be set in a clear light, by a
reference to the face of the certificate itself, where the

> AnnaU of Congress, Vol. I, pp. 1286 ff. See below, p. 184.

HAMILTON'S SYSTEM BEFORE CONGRESS 145

promise is not to the original holder alone, there is an alter-
native to A B, or bearer, either one or the other. Will
any one say, the bearer is not concerned in the contract?
How can you say to the assignee, that you have nothing
to do with him in this business, when the resolutions of
Congress, and the express words of the evidence acknowl-
edged him a party in the contract, at least equal to the
original creditor? . . . Considering this in every point
of view, I am free to declare that public justice requires the
bearer to be considered as the original creditor."

The original holder, Boudinot placed in the position of
those unfortunate persons whose property was destroyed
by British soldiers during the revolution, ''with this differ-
ence, that the loss of one was voluntary, on the principle
of yielding a part to save a part." The speaker then in-
quired what justice would say in the matter : "Suppose the
case to be that of a private person before a court of equity,
or even that of a nation before that Supreme Tribunal
which forces the most potent to do right. A is bound to
B in an express contract ; A fails in the performance, which
reduces B to distress ; B, with the assent of A, sells to C
(by which he is considerably relieved), though at an under
rate, and therefore suffers fifty per cent loss ; C calls for
payment from A, of his principal and simple interest ; B
calls for damages suffered by the breach of A's promise.
Where is the court of law or equity in the world ; nay,
where is the court in more pure regions, which would not
give the debt to C, and damages to B, and both against A?
There is no room for a decree against C. . . . I well know
the worth, the honor, and integrity of the gentleman who
brought this proposition forward, and I would appeal to
these qualities to answer me. Suppose, as an original holder,
he was to have given him, by the United States, ten shillings

146 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

out of every twenty he had assigned, at the expense of the
assignee, would he not, on a principle of honor, return it?"

Madison's proposition to discriminate between original
holders and assignees was defeated on February 22 by a
large majority, thirty-six to thirteen. Thus was settled
the not inconsiderable question of whether, the ^nds of the
new government and the -augmented fluid capital, were to
be widely .distributed, among original holders or concen-
txated in the cities where most of the assignees and
s|ieculative purchasers lived. It is Eir-iftteresting commen-
tary, perhaps not without significance, that of the sixty-
four members of the House at that time nearly one-half,
twenty-nine, appeared on the funding books of the govern-
ment as security holders under the law of August 4, 1790.
How the security holders were divided on Madison's prop-
osition we do not know, for no roll-call occurred on that
occasion.^

After the attempt to discriminate between original holders
and assignees was defeated, the proposition to augment
the national debt by about fifty per cent, through the assump-
tion of the state debts came before Congress for considera-
tion. Here, as in the preceding discussion, the economics
and politics of the debt were brought under review. A

> Annals of Congress, Vol. II, p. 1344. While the contest over Madison's propo-
sition to discriminate between original holders and purchasers of securities wa8
being waged, the Senators, as well as private citizens, followed the debates with
keen interest. Maclay records in his Journal under the date of February 15 :
"Adjourned and went to hear the debates in the lower house. Sedgwick, Law-
rence, Smith, and Ames took the whole day. They seemed to aim at one point,
to make Madison ridiculous. Ames delivered a long string of studied sentences,
but he did not use a single argument that seemed to leave an impression. He had
public faith, public credit, honor, and, above all, justice, as often over as an Indian
would the Great Spirit, and, if possible, with less meaning, and to as little purpose.
Hamilton, at the head of the speculators, with all the courtiers, are on one side.
These I call the party who are actuated by interest. The opposition are governed
by principle. But I fear in this case interest will outweigh principle." Sketchet
of Debate in the First Senate of the United States (Hanisburg ed.), p. 169.

HAMILTON'S SYSTEM BEFORE CONGRESS 147

Federalist champion, Fisher Ames, explained the advantages
of the fiscal system in an astounding argument to the effect
that the people were adding capital to their own possessions
by self-denying taxation. "The debt," he said, "is to be
considered, when funded, as an increase of active capital.
We have been often told that a public debt is not a blessing,
but an evil. We are not to compare a debt with no debt
for it is a desirable thing to be free from debt ; but the
debt is already contracted, and we are to compare an un-
funded fluctuating debt with a funded debt. Such a debt
as the latter may be comparatively a blessing, for it makes
the capital transferable as well as the income. We have
but a small share of personal property ; but this will make
the very land and houses circulate. It is true it is an arti-
ficial capital formed by a charge upon every other capital,
but it is also true, that it is formed by small savings in ex-
pense, and if the taxes were not to be laid, there would not
be an increase of wealth at the end of a year equal to the
debt or the interest of it. A single cent in the price of an
article cannot be said to impoverish the people, or to re-
strain them from enjoying their usual habits of living.
Indeed, it may tend in some degree to prevent excess, and
to promote frugality, which will enrich the people. But
at the end of the year these almost imperceptible sums,
by their union into one mass, acquire a new power. The
whole may be said to have properties which did not belong
to the separate parts. The active circulation promoted
by the debt will, in a considerable degree, compensate the
burthen of paying taxes. Those whose property is increased
by possessing the debt will become greater consumers in
proportion, and contribute largely to the revenue." ^

The Anti-Federalist leader, Jackson, of Georgia, was un-

» Ibid., Vol. II, p. 1483.

148 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

able to see exactly how the people, by taxing themselves to
maintain a large funded debt, were themselves to derive
Vthe advantage. To him it seemed like taxing one section of
the community to benefit another, and furthermore, in his
opinion, it was the agricultural section that would have to
bear the brunt of the burden. In discussing the public
sentiment of the state of South Carolina, he said : " I be-
lieve I speak with justice, when I advance, that three-
fourths of the back inhabitants of that state are opposed
to the measure. Sir, they are republicans, who have fought
and bled for the cause of liberty, and know the value of it.
I know and regard them as such, and although I wish not
to wound the feelings of any gentleman present, I assert
that they will see through this thin veiled artifice to take a
portion of their state power from them, and they will feel
that continual drain of specie which must take place to
satisfy the appetites of basking speculators at the seat of
Government. . . . Connecticut manufactures a great deal,
and she imports little. Georgia manufactures nothing, and
imports everything. Therefore Georgia, although her popu-
lation is not near so large, contributes more to the public
treasury by impost. . . . Let us not rear a monument to
mankind of the impossibility of preserving repubhcan
manners, by aping European nations and laying the founda-
tion of our government in immense debts. Sir, our terms
of service, happily I believe for the country, are near ex-
piring. We shall return to the mass of the people, and
participate in the burdens we impose. When the cool hour
of investigation arrives, happy indeed will it be for us if,
amidst the murmurs of an oppressed people, we have not
to say, in self-condemnation, I too have been guilty of
bringing this load of sin on the nation, and this load of
fetters on the people. America, sir, will not always think

HAMILTON'S SYSTEM BEFORE CONGRESS 149

as is the fashion of the present day ; and when the iron hand
of tyranny is felt, denunciations will fall on those who, by
imposing this enormous and iniquitous debt, will beggar
the people and bind them in chains." ^ ^

The politics of assumption, namely the firmer establish-
ment of the Constitution and the federal government,
was not overlooked in the debate. On May 25, 1790,
Ames took this point up at the close of a long speech, say-
ing: ''Little notice has been taken of the argument for
assumption, which, if just, is entitled to a great deal. I
mean that which has been urged to show that it will
strengthen the Government. The answer given is, that
instead of pecuniary influence, new powers are wanting to
the Constitution. . . . Before we ask for new powers on
paper, let us exercise those which are actually vested in
Congress. What will the new powers avail us, if we suffer
the Constitution to become a dead letter? . . . Little
topics of objection sink to nothing when it is allowed that
the assumption will strengthen the Government. . . .
Shall we make the union less strong than the people have
intended to make it, by adopting the Constitution? And

1 Annala of Congress, Vol. II, pp. 1748-1752. The Southern position on assump-
tion was concisely summed up in a letter written by Oliver Wolcott, of the Treas-
ury Department, in February, 1790: "Congress are proceeding in their delibera-
tions on the Secretary's report. The Northern states seem generally to favor the
plan. In Virginia and some other states, there is a determined and stubborn
opposition. They fear a consolidation of the government ; and also that if their
state debts are assumed all the securities will be purchased by foreigners and by
their neighbors. They say that the system of raising revenues by imposts oper-
ates unequally, they being the greatest consumers ; that to remedy this inequality
by a land tax, will make such establishments necessary as will render the general
government formidable ; that though the assumption will be a temporary relief
by causing the revenues to be expended where they are collected, yet in the end it
will operate to them like a foreign debt, as they know the disposition of their people
will be to sell everything which will produce money. . . . The worst circumstances
attending our affairs, arise from the groat variety of prejudices and manners in the
United States. If they shall not be shortly assimilated, I fear that disagreeable
consequences will ensue." Gibbs, op. cit., Vol. I, p. 39.

150 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

do not all agree that the assumption is not a neutral meas-
ure? If its adoption will give strength to the union, its
rejection will have a contrary effect. ... At this late
period of the debate, it is hardly possible for gentlemen to
exercise impartiality. . . . They [the opposition] love their
country, and mean to serve it ; and I am sure they would
shrink from the spectre of its misery which haunts us ;
they would not consent to undo the Constitution in prac-
tice, to realize the evils which were only apprehended under
the Confederation, and which were prevented [from being
remedied] by the total want of power in Congress." ^

This use of the pubHc debt and the public creditors to
underwrite the Constitution and the federal government
was by no means overlooked by the opposition. Stone of

\JVIaryland saw it very clearly. "A strong binding force,
exterior or interior," he said, "is supposed essentially neces-
sary to keep together a government like ours ; and of all
the bands of political connexion, perhaps there is none
stronger than that which is formed by a uniform, compact,
and efficacious chain or system of revenue. A greater
thought could not have been conceived by man; and its
effect, I venture to predict, if adopted' by us, and carried
I into execution, will prove to the Federal government walls
of adamant, impregnable to any attempt upon its fabric
or operations. I have viewed it with some degree of atten-
tion, and I see the subject rise into gigantic height. . . .
I think, sir, wherever the property is, there will be the power.
And if the general government has the payment of all the
debts, it must, of course, have all the revenue ; and if it
possesses the whole revenue, it is equal, in other words, to

vthe whole power." ^

The same theme was also taken up by Jackson in his final

» AnnaU of Congresa, Vol. II, p. 1668. » Ibid., Vol. II, p. 1359.

HAMILTON'S SYSTEM BEFORE CONGRESS 151

assault on assumption: ''The object certainly was the ab- l^
sorbing of the whole of the state powers within the vortex of
the all-devouring General Government ; seven years were we
fighting to establish props for liberty, and in less than two
years since the adoption of the Constitution are we trying
to kick them all away, and he is the ablest politician, and
the best man of the day, who can do most to destroy the
child of liberty of his own raising. ... So far will it be
from producing the harmony the gentleman has supposed,
that I think I can venture to prophesy it will occasion dis-
cord, and generate rancor against the Union. For if it
benefits one part of the United States, it oppresses another.
If it lulls the Shays of the North it will rouse the SuUivans
of the South." ^ '^

Speaking on the same point on an earlier occasion, Jack-
son had warned the Federalists that the debt could not in
fact help bind the Southern states to the Union because the
state and continental securities in the South were already
gone from the hands of the original holders into the hands
of the speculators in the commercial cities.^ He also de-
clared his belief, doubtless with some exaggeration, that
there were not twenty original holders in the state of
Georgia.^ The general truth of Jackson's contention-that —
the public funds in the South had been bought up is ade-
guajtely demonstrated by the records of the Treasury De-
partment,* and his prophecy that discord would be stirred
up in the sections where there were few security holders
was strangely fulfilled by the growth of Anti-Federalism
in North Carolina, Georgia, and the western parts of Virginia
.and South Carolina.

1 Ibid., Vol. II, p. 1749.

* Ibid., Vol. II. p. 1429.
Ubid., Yol. II, p. 1551.

* See Economic Interpretation of the Constitution, p. 36.

152 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

When at last the advocates of assumption were victorious
by the dint of skilful negotiation/ Congress adjourned for
a brief respite ; and then finally, in the third and last session,
it took up the third of Hamilton's great fiscal measures, the
Bank bill. The managers who were in charge of this
bill evidently thought it wise to start the measure in the
Senate where the proportion of heavy investors in public
funds was larger than in the House of Representatives.^
The measure appears to have been pressed with singular
zeal, for the Report of the Secretary of the Treasury was
not made pubHc until December 14, 1790, and, notwithstand-
ing, the intervening Holidays, an act to incorporate the Bank
passed the Senate on January 20, 1791. The fact that we
have no records of the discussions in the Senate for that
period prevents our following the arguments on the bill, but
the progress of the measure in the lower house may be easily
traced.

The debate opened in the House of Representatives on the
Bank bill on February 1, 1791, and it had hardly got under
way before the old antagonism of the agricultural to the
capitaHstic interests, which had dogged the steps of every
fiscal measure proposed by the Secretary of the Treasury,
made its appearance. After Smith of Charleston, South
Carolina, made a few desultory remarks in favor of the bill,
the famous champion of agrarianism, Jackson, of Georgia,

1 See below, Chap. V.

* "It is known that the Bank bill originated not in the House of Representatives,
but in the close and mysterious House of Senators, clothed by the weight of whose
sanction it was sent to the other House, when it was hurried through with immense
speed. ... It is acknowledged that the bill has been greatly applauded by some
proprietors in the public funds amongst us, who thought they saw their interest
concerned in promoting it — and hence the most powerful class of orators I have
met with in favor of it arc of this number. As to the general yeomanry of Amer-
ica, thoy have given themselves no trouble in this business, and will probably con-
cern themselves little about it." Gazette of the United States, May 11, 1791.
See below, p. 202.

HAMILTON'S SYSTEM BEFORE CONGRESS 153

where there were few security holders to take advantage of
the opportunity for gain opened by the measure, announced
that he resolutely was opposed to the bill on principle.

He declared that the bill in question was a piece of class
legislation : " This plan of a National Bank is calculated to
benefit a small part of the United States, the mercantile
interest only ; the farmers, the yeomanry, will derive no
advantage from it ; as the bank bills will not circulate to the
extremities of the Union. He said, he had never seen a
bank bill in the state of Georgia, nor will they ever benefit
the farmers of that state, or of New Hampshire. . . . He
urged the unconstitutionality of the plan ; called it a monop-
oly ; such a one as contravenes the spirit of the Constitu-
tion ; a monopoly of a very extraordinary nature ; a monop-
oly of the public moneys for the benefit of the corporation
to be created. He then read several passages from the
Federalist, which he said were directly contrary to the as-
sumption of the power proposed by the bill." ^

Stone, of Maryland, came to the support of Jackson : "He
observed, that upon the present occasion, the opinions re-
specting the Constitution seem to be divided by a geographi-
cal line, dividing the continent. Hence it might be inferred,
that other considerations mixed with the question ; and it
had been insinuated that it was warped by the future seat of
Government. But other causes may be assigned for the
diversity of sentiment — the people to the Eastward began
earliest in favor of liberty. They pursued freedom into
anarchy — starting at the precipice of confusion, they are
now vibrating far the other way. He said, that all our
taxes are paid by the consumers of manufactures ; those
taxes are all bounties upon home manufactures. The people
to the Eastward are the manufacturers of this country ; it

1 Annals of Congress, Vol. II, p. 1941.

154 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

was no wonder that they should endeavor to strengthen the
hands of a Government by which they are so peculiarly bene-
fited. It is a fact, that the greatest part of the Continental
debt has travelled Eastward of the Potomac. This law is to
raise the value of the continental paper. Here, then, is the
strong impulse of immediate interest in favor of the bank.
He took notice of the distinction made by the plan of the
bill, between continental and state paper. The state paper,
on account of the partial payments of interest, still remained
in the respective states. But this could not, by the present
system, be subscribed ; so that the Southern states were de-
prived of the advantage that might have been given to the
only paper they have. . . . He proceeded. I say there is
no necessity, there is no occasion, for this Bank. The states
* will institute banks which will answer every purpose. But
a distrust of the states is shown in every movement of Con-
gress. ... By this bill, a few stockholders may institute
banks in particular states, to their aggrandizement and the
oppression of others. This bank will swallow up the state
banks ; it will raise in this country a moneyed interest at the
devotion of the government ; it may bribe both states and
individuals. . . . He said it is one of those sly and subtle
movements which marched silently to its object; the vices
of it were at first not palpable or obvious; but when the
people saw a distinction of banks created — when they
viewed with astonishment the train of wealth which followed
individuals, whose sudden exaltation surprised even the pos-
sessors— they would inquire how all this came about. . . .
But, Gentlemen will say, upon emergencies the Bank will
loan money [to the government]. We differ in opinion.
I think when we want it most the bank will be most unable
and unwilling to lend. If we are in prosperity, we can
borrow money almost anywhere ; but in adversity, stock-

HAMILTON'S SYSTEM BEFORE CONGRESS 155

holders will avoid us with as much caution as any other
capitalists." ^

While Southern Representatives were laying stress upon
the undue advantages offered by the measure to Northern
capitalistic interests, Representatives from the North ad-
verted to those advantages as among the merits of the bill.
Ames, of Massachusetts, said, "It seems to be conceded V
within doors and without, that a public bank would be useful
to trade, that it is almost essential to revenue, and that it is
little short of indispensably necessary in times of public
emergency. . . . This new capital will invigorate trade
and manufactures with new energy. It will furnish a me-
dium for the collection of the revenues ; and if Government
should be pressed by a sudden necessity, it will afford season-
able and effectual aid. ... It is of the first utility to trade.
Indeed, the intercourse from state to state can never be on a
good footing without a bank, whose paper will circulate more
extensively than that of any state bank." ^ V

Sedgwick, of Massachusetts, took the same view as his
colleague, Ames. He had little patience with theoretical
objections. "If we attempt to proceed in one direction," he
complained, "our ears are assailed with the exclamation of
'the Constitution is in danger ;' if we attempt to obtain our
objects by pursuing a different course, we are told the pass
is guarded by the stern spirit of democracy." Having ex-
pressed his slight regard for such arguments against the
measure, he proceeded to consider the utility of banks.
"There were two circumstances," he said, "which would
render banks of more importance in this country than in
any other country where they are at present in use : the
first, the commercial enterprise of our merchants compared*
with the smallness of their capitals, which, as we had no

1 Annals of Congress, Vol. II, pp. 1981 S. » Ibid., Vol. II, pp. 1953 ff.

156 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

large manufacturing capitals, whereby the precious metals
could be retained in circulation, would frequently, by their
exportation, greatly distress the people ; the other originated
from a measure of the Government. . . . Gentlemen had
been pleased to consider the proposed terms as giving an
undue advantage to the stockholders. He would leave this
part of the subject to gentlemen who better understood it ;
only observing, that as Government must rely principally on
merchants to obtain the proposed stock, it would be neces-
sary to afford to them sufficient motives to withdraw from
their commercial pursuits a part of their capitals." ^

Gerry, also of Massachusetts, as usual came to the aid of
the holders of public securities, for whose advantage he was
especially solicitous, notwithstanding his oft-repeated asser-
tions of disinterestedness. "The plan proposed by the
Secretary of the Treasury, which is now the subject of dis-
cussion," he said, "does honor, hke all his other measures,
to his head and heart ; it will be mutually beneficial to the
stockholders and to Government, and consequently so to the
people. The stockholders by this plan will be deeply inter-
ested in supporting Government ; because three-quarters of
their capital, consisting of funded certificates, depend on the
existence of Government, which therefore is the prop of their
capital, the main pillar that supports the bank. Again, the
credit of Government, which is immaterial to the other banks,
is essential to the National Bank, for the annual interest of
three-quarters of its capital, which must form a great share of
its profits, will depend altogether on the credit of Govern-
ment, and produce, on the part of the stockholders, the
strongest attachment to it." ^

It is useless to pursue further the contest which turned on

' Annals of Congress, Vol. II, pp. 1961 ff.
*Ibid.. Vol. II, p. 2001.

HAMILTON'S SYSTEM BEFORE CONGRESS 157

the question as to whether the fluid capital of the country
should be augmented and additional advantages offered to
the holder of public funds, particularly continental funds,
to secure their adherence and devotion to the new govern-
ment. That this was the essence of the matter appeared »
again and again in the discussion in Congress and outside,
and that the country was divided on this proposition accord-
ing to the intensity of the direct economic interests of the
several sections was evidenced by the vote in Congress on
propositions connected with the Bank bill.

Having shown the economic character of the real issue
between the parties, it would seem a work of supererogation
to examine the discussion of the constitutionality of the
Bank bill ; but this first great war of the dialecticians about
the powers of Congress occupies such a prominent place in
the history of our constitutional law, that it deserves the
respectful attention, even of those who believe with Mr.
Justice Holmes, that "general propositions do not decide
concrete cases," and that every constitutional decision "de-
pends on a judgment or intuition more subtle than any artic-
ulate major premise."

It is true that questions of constitutionality had arisen in
connection with the assumption of state debts, the removal
power of the President, and many other matters,^ but it was
the Bank bill which first summoned to the political battle ^
that high talent for analysis, deduction, reticulation, and

' "We have near twenty antis, dragons watching the tree of liberty, and who
consider every strong measure, and almost every ordinary one, as an attempt to
rob the tree of its fair fruit. We hear, incessantly, from the old foes of the Consti-
tution, 'this is unconstitutional, and that is;' and indeed, what is not. I scarce
know a point which has not produced this cry, not excepting a motion for adjourn-
ing. If the Constitution is what they affect to think it, their former opposition to
such a nonentity was improper. . . . The fishery bill was unconstitutional ; is it
unconstitutional to receive plans of finance from the Secretary ; to give bounties ;
to make the militia worth having ; order is unconstitutional ; credit is ten fold
worse." Life and Works of Fisher Ames, Vol. I, p. U4.

158 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

speculative imagination which has characterized American
constitutional conflicts from that day to this.
r In the House of Representatives the opposition to the
//constitutionaHty of the Bank was led by James Madison, of
[[Virginia. Those who are inclined to bring against the
' "father of the Constitution," a charge of inconsistency in
thus opposing a measure so eminently calculated to bring
powerful support to the new government will do well to
consider two facts. In the first place, Madison, although he
was anxious to see the federal government strong at home
and respectable abroad, from the beginning of the constitu-
tional movement, looked upon the necessity for restrictions
on the state legislatures as the fundamental reason in favor
of the framing and adoption of the Constitution.^ In the
second place, the speculations and culpable conduct of so
many members of the first federal Congress so outraged
Madison's sense of propriety that he was unwilling to lend
any countenance to a movement calculated to afford another
opportunity for gambling in public paper on a magnificent
scale.^ Madison had none of the securities himself, and was
a somewhat disinterested observer of the course of events
under Washington's administration. He therefore had many
reasons for attacking the constitutionality of the law which
put such large sums in the hands of Northern speculators.

Although some of the Federalists in the House deemed the
question of constitutionality worthy of extended discussion,
it appears that Smith, of South Carolina, was inchned to dis-
miss it on the practical ground that "constitutionality grows
out of expediency." ^ In fact, as long as they were in power
the Federalists had no doubt about the "constitutionality" of
their own measures. The great Marshall was under no de-

' Economic Interpretation, p. 178. * Ibid., p. 125.

• Annals of Congress, Vol. II, p. 1994.

HAMILTON'S SYSTEM BEFORE CONGRESS 159

lusion about constitutional law as an exact science, and in a
sentence which anticipated Mr. Justice Holmes' famous dic-
tum that subtle intuitions rather than articulate major prem-
ises decide concrete cases, he spoke of the controversy over
the constitutionality of the Bank as follows : "The judgment
is so much influenced by the wishes, the affections, and the
general theories of those by whom any political proposition
is decided that a contrariety of opinion on this great con-
stitutional question ought to excite no surprise." ^

The question of constitutionality which was so ardently
discussed by members of Congress was no less earnestly
considered by members of Washington's cabinet, before
whom it was laid for consideration and report. Hamilton,
naturally enough, thought the Bank constitutional and
wrote his opinion in a document which has justly passed
into history as one of the greatest of American state papers.
Jefferson and Randolph, both from Virginia and both later
to be identified with the great agrarian party that was
destined to sweep the Federalists out of power, took a firm
stand against the constitutionality of the Bank. The Sec-
retary of State elaborated his views in a state paper which
is fairly comparable in acumen and skilful arrangement to
the brief which emanated from the Treasury. As Marshall
remarked, the "wishes, the affections, and the general theo-
ries" of the contestants in logic had a "decided" influence
on their judgment. Washington was convinced by Hamil-
ton with whose economic policy he agreed in the main,
and on February 25, 1791, he signed the act to incorporate
the subscribers to the Bank of the United States. The last
of Hamilton's great fiscal devices was completed.

It remains now to consider that other pillar of Hamilton's
capitalistic edifice, the protective tariff designed to develop

1 Life of Washington (2d ed.), Vol. II, p. 205.

160 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

American industry, give more extensive employment to the
r fluid capital created by the funding and Bank schemes, and
(to draw another allied group of interests to the aid of the
security and bank-stock holders in maintaining the new
government. Hamilton's Report on Manufactures was not
communicated to the House of Representatives until Decem-
ber 5, 1791. However, the debate which had already
taken place on the first revenue bill, in 1789, indicated that
the group who supported the Secretary's fiscal policies were
quite as warmly attached to the principle of protection for
American commerce and manufactures, although often-
divided on questions of ways and means.

Efforts have been made to represent the Fathers as free-
traders, and Democrats of a later time even went so far as to
declare protective tariffs '' unconstitutional." All this is
without historical warrant. There can be no doubt that
the first revenue measure under the Constitution was de-
signed for protection as well as for income. Its preamble
declares as much : ''Whereas it is necessary for the support
of the government, for the discharge of the debts of the
United States, and the encouragement and protection of
manufactures." And a careful study of the debates and
contemporary sources supports that view.^

The voice of the manufacturing interests of Pennsylvania
was heard at the very beginning in the House of Repre-
sentatives in favor of a system of protective tariff. It was
on Wednesday, April 1, 1789, that a quorum was secured ;
the rules of the new assembly were adopted on the 7th ; the
following day Madison laid before the committee of the
whole his proposals for duties on imposts. The next day,
Hartley (who had been a member of the Pennsylvania con-

' W. Hill, Early Stages of the Tariff Policy (Publications of the American Eco-
nomic Association, Vol. VIII, pp. 107 ff.) ; Journal of Political Economy, Vol. II,
pp. 64 ff.

HAMILTON'S SYSTEM BEFORE CONGRESS 161

vention and voted in favor of the Constitution) served notice
that the revenue system was to be viewed as an instrument
of protection. "I have observed, sir," he said, "from the
conversation of the members, that it is in the contemplation
of some to enter on this business in a Hmited and partial
manner, as it relates to revenue alone ; but, for my own part,
I wish to do it on as broad a bottom as is at this time prac-
ticable. ... If we consult the history of the ancient
world, we shall see that they have thought proper, for a
long time past, to give great encouragement to the estab-
lishment of manufactures, by laying such partial duties on
the importation of foreign goods, as to give the home manu-
factures a considerable advantage in the price when brought
to market. ... I think it both politic and just that the
fostering hand of the General Government should extend
to all those manufactures which will tend to national utility.
. . . Our stock of materials is, in many instances, equal to
the greatest demand and our artisans sufficient to work
them up even for exportation. In these cases, I take it to
be the policy of every enlightened nation to give their
manufactures that degree of encouragement necessary to
perfect them, without oppressing the other parts of the com-
munity ; and under this encouragement the industry of the
manufacturer will be employed to add to the wealth of the
nation." ^

The importance of securing a revenue at once to pay the /
current expenses of the government and sustain its credit,-A
prevented a full discussion of the principle of protection
which Hartley suggested, but Madison took advantage of
the occasion to announce his doctrines on the subject. "I
own myself the friend," he said, ''to a very free system of
commerce, and hold it as a truth, that commercial shackles

1 Annals of Congress, Vol. I, p. 114.
M

162 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

are generally unjust, oppressive, and impolitic ; it is also a
truth, that if industry and labor are left to take their own
course, they will generally be directed to those objects
which are the most productive, and this in a more certain
and direct manner than the wisdom of the most enlightened
legislature could point out." Having stated this broad
principle, Madison proceeded, however, to enumerate cer-
tain exceptions wherein commerce might be regulated and
manufactures protected within the limits of sound policy.^

After these somewhat desultory remarks on the general
principle of protection, the House proceeded with the con-
sideration of particular schedules and the debates which
ensued showed that the tariff was then, as ever, a "local
issue." Nevertheless, in the contest over the rates of duty
to be imposed on separate articles, the antagonism between
agriculture and manufacturing came out very clearly.^

We may illustrate the nature of this antagonism by refer-
ence to the debate over the duty on unwrought steel. On
April 15, Lee, of Virginia, moved to strike that item from the
schedule, observing that "the consumption of steel was
very great, and essentially necessary to agricultural improve-
ments. He did not believe any gentleman would contend,

> Annals of Congress, Vol. I, p. 116.

* "The North advocated a high duty on mm, a prosperous manufacture which
ought to be protected against Jamaica distilleries ; while it objected to a high duty
upon molasses, which was largely consumed as an article of food in New England
and was also the raw material for the famous rum of that section. On the other
hand. New England opposed high duties on hemp, because it would increase the
coat of cordage, which was an essential material in shipbuilding, while those
interested in western lands wished to develop the growth of hemp. New England
representatives were willing to encourage the manufacture of nails by a protective
duty, and Pennsylvania championed the special needs of steel ; but a southern
representative feared that agriculture would be depressed by high prices of farming
tools. ... In general, the South strongly protested against the immense increase
in rates proposed in protective amendments, and animadverted on the sectional
character of a tariff which was designed to assist the producing manufactures
rather than the purchasing agriculturalists." Dewey, Financial History of the
United Slates, p. 81.

HAMILTON'S SYSTEM BEFORE CONGRESS 163

that enough of this article to answer consumption could be
fabricated in any part of the Union : hence it would operate
as an oppressive, though indirect tax upon agriculture, and
any tax whether direct or indirect, upon this interest, at this
juncture, would he unwise and impolitic.'^ ^ Tucker, of
South Carolina, joined in this opinion. Madison, of Vir-
ginia, also agreed, and suggested that the article in question
be transferred to the non-enumerated list where it would
be subject only to five per cent. The South Carolina Rep-
resentatives, said he, "considered the smallest tax on this
article to be a burthen on agriculture, which ought to be
considered an interest most deserving protection and en-
couragement." ^

Unwrought steel found its defenders in the Pennsylvania
delegation. Clymer, who had been a member of the Con-
vention which drafted the Constitution, declared, 'Hhat the
manufacture of steel in America was rather in its infancy ;
but as all the materials necessary to make it were the prod-
uce of almost every state in the Union, and as the manufacture
was already established, and attended with considerable
success, he deemed it prudent to emancipate our coun-
try from the manacles in which she was held by foreign
manufactures. A furnace in Philadelphia, with a very small

> Annals of Congress, Vol. I, pp. 153 ff. ; italics mine.

* That the Constitution would bring about a subjection of the landed to the
commercial interests was prophesied by George Mason, a member of the Philadel-
phia Convention from Virginia, and in fact assigned as one of his reasons for
opposing the adoption of the system. Among his objections forwarded to Wash-
ington in a letter of October 7, 1787, he said : "By requiring only a majority to
make all commercikl and navigation laws, the five southern states (whose produce
and circumstances are totally different from that of the eight northern and eastern
states) will be ruined ; for such rigid and premature regulations may be made, as
will enable the merchants of the northern and eastern states not only to demand an
exorbitant freight, but to monopolize the purchase of the commodities at their
own price, for many years : to the great injury of the landed interest and impov-
erishment of the people : and the danger is the greater, as the gain on one side will
be in proportion to the loss on the other." Documentary History of the Constitution,
Vol. IV, p. 318.

164 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

aid from the legislature of Pennsylvania, made three hun-
dred tons in two years, and now makes at the rate of two
hundred and thirty tons annually, and with a little further
encouragement would supply enough for the consumption
of the Union. He hoped, therefore, gentlemen would be
disposed, under these considerations, to extend a degree of
patronage to a manufacture which a moment's reflection
would convince them was highly deserving protection."
Fitzsimons, Hkewise of Pennsylvania and a former member
of the constitutional Convention of 1787, warmly supported
Clymer, and begged his colleagues to get rid of local con-
siderations and to remember the concessions which his
state had made on other points.

It is abundantly evident from the debates and contem-
porary discussions that the revenue measure, like the funding
and Bank measures, was designed to encourage capitahstic
interests. Of course, it was said at the time that the whole
country was to benefit from the tariff as well as from the
augmentation of capital which the Federahst scheme con-
templated ; but the representatives of the agrarian regions
were unconvinced. They regarded the protective tariff as
a burden laid upon the consumers, of whom the major
portion were farmers, for the benefit of the manufacturing
or capitahstic classes. The tariff, therefore, added to the
antagonism between the two dominant economic interests
in the country, and helped to sharpen the division between
North and South.

CHAPTER VI

SECURITY HOLDING AND POLITICS^

The first Congress of the United States had scarcely
adjourned before the political storm burst. The ineluctable
and truculent opponents of the Constitution, who had seen
in its adoption the triumph of ''the rich and well born,"
were now convinced that their worst fears had been well
founded. In their opinion, it had been no mere victory
of talents and numbers, but the conquest of the people
through chicanery. Dark hints of corruption soon sprang
into circulation, and after the controversy was well under
way John Taylor startled the country with his Examination
of the Late Proceedings in Congress Respecting the Offi^cial
Conduct of the Secretary of the Treasury,^ a remarkable
pamphlet in which he distinctly charged the members of
Congress with being personally interested in the operations
of the Treasury Department, and therefore not represen-
tatives of the people at all.^

Although Jefferson derived considerable information
concerning the operations of Congress from Taylor's pam-
phlet, he had come to similar conclusions at least two years
before its publication. As early as February 4, 1791, that
is, about six months after the passage of the funding bill
and before the enactment of the Bank bill, he wrote to

1 This chapter is largely a reprint of an article published in The American Histor-
ical Review for January, 1914.

' For an examination of this pamphlet, see below, p. 197.

' Though this pamphlet dealt particularly with the second Congress, a large num-
ber of the members of that Congress had served in the first Congress which laid the
foundations of Hamilton's system.

165

166 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

^ George Mason : "What is said in our country of the fiscal
arrangements now going on? I really fear their effect
when I consider the present temper of the Southern states.

. Whether these measures be right or wrong abstractedly,
more attention should be paid to the general opinion. . . .
The only corrective of what is corrupt in our present form
of government will be the augmentation of the numbers in
the lower house, so as to be a more agricultural represen-
tation, which may put that interest above that of the stock-

N^obbers." ^

A year later Jefferson became more specific. He declared
that the great outlines of Hamilton's system had been carried
"by the votes of the very persons who, having swallowed
his bait, were laying themselves out to profit by his plans" ;
and he added that "had these persons withdrawn, as those
interested in a question ever should, the vote of the dis-
interested majority was clearly the reverse of what they

Vmade it. These were no longer the votes then of the repre-
sentatives of the people . . . and it was impossible to con-

^ sider their decisions, which had nothing in view but to en-
rich themselves, as the measures of the fair majority, which

>,ought always to be respected." ^

It seems that as Jefferson watched the progress of Hamil-
^ ; ton's measures in Congress, he became more and more

convinced that the members who supported them represented
their own personal interests rather than the mass of the
voters — particularly, the agrarian interests. At all events,
he took the trouble to compile a roll of the "paper men" in
Congress in March, 1793, and this list he incorporated in the
Anas. This list of stockholders in the Bank embraces the
following men who were in the first Congress ; Oilman,

« WHtings (Ford ed.), Vol. V, p. 275.

* Ibid., Vol. VI, pp. 102-103. For this and several other references, I am in-
debted to Professor Max Farrand.

SECURITY HOLDING AND POLITICS 167

Gerry, Sedgwick, Ames, Goodhue, Trumbull, Wadsworth,
Benson, Lawrence, Boudinot, Fitzsimons, Heister, William-
son, W. L. Smith, Sherman, Ellsworth, King, Robert Morris,
W. S. Johnson, and Izard. After this enumeration of the
paper men, Jefferson places a table showing the composi-
tion of Congress at that time :

H.-Repr. Senate

Stockholders (Bank) 16 5

Other paper _3 2^

19 7

Suspected 2 4

It is not apparent how Jefferson secured this information,
but it would seem from the foot-notes which he adds that
he derived it from personal inquiry and through the in-
quiries of his friends. Whether he had access to the Treas-
ury and Bank books through a clerk or a partisan is a matter
for conjecture.^

Jefferson was not alone in characterizing the Federalist
party in Congress as a group held together by private eco-
nomic interests. All through Maclay's querulous sketches of
the debates in the first Senate there runs a plaint that some
of his colleagues were busily engrossed in augmenting their
personal fortunes as the prices of securities mounted upward
during the battle over the funding process. Maclayeven
went so far as to say that the whole funding scheme was
simply a speculator's device. ^'Pay the debt," he declared,
"or even put it in a train of payment, and you no longer
furnish food for speculation. The great obj ect is by funding,
and so forth, to raise the certificates to par ; thus the specu-
lators, who now have them nearly all engrossed, will clear
above three hundred per cent." ^ Maclay not only charged
many of his colleagues with speculation, but denounced the

* Writings (Ford ed.). Vol. I, p. 223. « Maclay, op. cit., p. 171.

168 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

whole funding process as a gambler's device. He reported
rumors to the effect that Vining of Delaware was offered a
thousand guineas for his vote in favor of the assumption of
state debts ; but he confessed that he did not know whether
pecuniary influence was actually used although he was
" certain that every other kind of management has been prac-
ticed and every tool at work that could be thought of." ^

Madison also discovered the weight of personal interest
in the Congress when he sought to bring about a discrimina-
tion between the original holders of pubhc paper and the
speculators and purchasers, and was defeated by a vote of
thirteen to thirty-six.^ Writing a year later to Jefferson, he
' described the subscriptions to the Bank as nothing but a
scramble for pubhc plunder and added that " of all the shame-
ful circumstances of this business, it is among the greatest to
see the members of the Legislature who were most active in
pushing this job openly grasping its emoluments."

V Long afterward, in the calm evening of his hfe, Jefferson

\ reduced to order some notes which he had made at the time

on the funding process and prepared a systematic account of

'^ the affair and his part in them.^ This account runs as fol-
lows: "Hamilton's financial system . . . had two objects;
1st, as a puzzle, to exclude popular understanding and in-
quiry ; 2d, as a machine for the corruption of the legislature ;
for he avowed the opinion, that man could be governed by
one of two motives only, force or interest ; force, he observed,
in this country, was out of the question, and the interests,
therefore, of the members must be laid hold of, to keep the
legislative in unison with the executive. And with grief and

» Maclay, op. dt., p. 209. * Above, p. 146.

« "At this day, after the lapse of twenty-five years or more from their dates, I
have given the whole a calm revisal, when the passions of the times are passed away
and the reasons of the transactions alone act upon the judgment." The Anaa in
Works (Washington ed.). Vol. IX, p. 87.

SECURITY HOLDING AND POLITICS 169

shame it must be acknowledged that his machine was not
without effect ; that even in this, the birth of our govern-
ment, some members were found sordid enough to bend
their duty to their interests, and to look after personal rather
than public good.

"It is well known that during the war the greatest difii- V
culty we encountered was the want of money or means to
pay our soldiers who fought, or our farmers, manufacturers,
and merchants who furnished the necessary supplies of food
and clothing for them. After the expedient of paper money
had exhausted itself, certificates of debt were given to indi-
vidual creditors, with assurance of payment so soon as the I
United States should be able. But the distresses of these
people often obliged them to part with these for the half, the
fifth, or even a tenth of their value ; and speculators had
made a trade of cozening them from tHe holders by the most
fraudulent practices, and persuasions that they never would
be paid. In the bill for funding and paying these, Hamil- ^
ton made no difference between the original holders and the
fraudulent purchasers of this paper. Great and just repug-
nance arose at putting these two classes of creditors on the
same footing, and great exertions were used to pay the former
the full value, and to the latter, the price only which they
had paid, with interest. But this would have prevented the
game which was to be played, and for which the minds of
greedy members were already tutored and prepared. When
the trial of strength on these several efforts had indicated
the form in which the bill would finally pass, this being known
within doors sooner than without, and especially, than to
those who were in distant parts of the union, the base
scramble began. Couriers and relay horses by land, and
swift sailing pilot boats by sea, were flying in all directions.
Active partners and agents were associated and employed in

170 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

every state, town, and country neighborhood, and this

paper was bought up at five shiUings, and even as low as two

shiUings in the pound, before the holder knew that Congress

"^had already provided for its redemption at par. Immense

sums were thus filched from the poor and ignorant, and

fortunes accumulated by those who had themselves been

' poor enough before. Men thus enriched by the dexterity

of a leader, would follow, of course, the chief who was leading

them to fortune, and become the zealous instruments of all

'^his enterprises.

"This game was over,^ and another was on the carpet at
the moment of my arrival ; and to this I was most ignorantly
and innocently made to hold the candle. This fiscal
manoeuvre is well known by the name of the assumption.
Independently of the debts of Congress, the States had
during the War contracted separate and heavy debts ;
and Massachusetts particularly, in an absurd attempt, ab-
surdly conducted, on the British post of Penobscott ; and
the more debt Hamilton could rake up, the more plunder for
his mercenaries. This money, whether wisely or foolishly
spent, was pretended to have been spent for general pur-
poses, and ought, therefore, to be paid from the general
purse. But it was objected, that nobody knew what these
debts were, what their amount or what their proofs. No
matter, we will guess them to be twenty millions. But of
these twenty millions, we do not know how much should be re-
imbursed to one state, or how much to another. No matter ;
we will guess. And so another scramble was set on foot
among the several states and some got much, some little,
some nothing. But the main object was obtained, the
phalanx of the Treasury was reinforced by additional re-

' Jefferson must here refer to the defeat of Madison's proposal for a discrimina-
tion. See above, p. 146.

SECURITY HOLDING AND POLITICS 171

cruits. This measure produced the most bitter and angry
contest ever known in Congress, before or since the union
of the states. I arrived in the midst of it. But a stranger
to the ground, a stranger to the actors in it, so long absent as
to have lost all familiarity with the subject, and as yet
unaware of its object, I took no concern in it. The great and
trying question, however, was lost in the House of Repre-
sentatives. So high were the feuds excited by this subject,
that on its rejection business was suspended. Congress
met and adjourned from day to day without doing anything,
the parties being too much out of temper to do business to-
gether. The eastern members particularly, who, with Smith
from South Carolina, were the principal gamblers in these
scenes, threatened a secession and a dissolution. Hamilton
was in despair. As I was going to the President's one day,
I met him in the street. He walked me backwards and
forwards before the President's door for half an hour. He
painted pathetically the temper into which the legislature
had been wrought ; the disgust of those who were called the
creditor states ; the danger of the secession of their members,
and the separation of the states. He observed that the mem-
bers of the administration ought to act in concert ; that al-
though this question was not of my department, yet a com-
mon duty should make it a common concern ; that the
President was the centre on which all administrative ques-
tions ultimately rested, and that all of us should rally
around him, and support, with joint efforts, measures ap-
proved by him ; and that the question having been lost by a
small majority only, it was probable that an appeal from me
to the judgment and discretion of some of my friends, might
effect a change in the vote, and the machine of government,
now suspended, might be again set into motion. I told him
that I was really a stranger to the whole subject ; that not

172 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

having yet informed myself of the system of finances adopted,
I knew not how far this was a necessary sequence ; that un-
doubtedly, if its rejection endangered a dissolution of our
Union at this incipient stage, I should deem that the most
unfortunate of all consequences, to avert which all partial
and temporary evils should be yielded. I proposed to him,
however, to dine with me the next day, and I would invite
another friend or two, bring them into conference together,
and I thought it impossible that reasonable men, consulting
together coolly, could fail, by some mutual sacrifices of opin-
ion, to form a compromise which was to save the Union.
The discussion took place. I could take no part in it but an
exhortatory one, because I was a stranger to the circum-
stances which should govern it. But it was finally agreed
that whatever importance had been attached to the rejec-
tion of this proposition, the preservation of the Union and
of concord among the states was more important, and that
therefore it would be better that the vote of rejection should
be rescinded, to effect which, some members should change
their votes. But it was observed that this pill would be par-
ticularly bitter to the southern states, and that some con-
comitant measure should be adopted to sweeten it a little to
them. There had been before propositions to fix the seat of
government either at Philadelphia or at Georgetown on the
iPotomac ; and it was thought that by giving it to Phila-
delphia for ten years and to Georgetown permanently after-
wards, this might, as an anodyne, calm in some degree the
ferment which might be excited by the other measure alone.
So two of the Potomac members (White and Lee, but White
with a revulsion of stomach almost convulsive) agreed to
change their votes, and Hamilton undertook to carry the
other point. In doing this, the influence he had established
over the eastern members, with the agency of Robert Morris

SECURITY HOLDING AND POLITICS 173

with those of the middle states, effected his side of the en-
gagement ; and so the Assumption was passed, and twenty
milhons of stock divided among favored states and thrown
in as a pabulum to the stock-jobbing herd. This added to
the number of votaries to the Treasury, and made its chief
the master of every vote in the legislature, which might
give to the government the direction suited to his political
views.

"I know well, and so must be understood, that nothingV
like a majority in Congress had yielded to this corruption.
Far from it. But a division, not very unequal, had already
taken place in the honest part of that body, between the
parties styled republican and federal. The latter being
monarchists in principle, adhered to Hamilton of course,
as their leader in that principle, and this mercenary phalanx
added to them, insured him always a majority in both
Houses : so that the whole action of the legislature was now
under the direction of the Treasury. Still the machine was
not complete. The effect of the funding system, and of the
Assumption, would be temporary ; it would be lost with the
loss of the individual members whom it has enriched, and
some engine of influence more permanent must be contrived,
while these myrmidons were yet in place to carry it through
all opposition. This engine was the Bank of the United
States. All that history is known, so I shall say nothingV
about it. While the government remained at Philadelphia, a
selection of members of both houses were constantly kept
as directors who, on every question interesting to that in-
stitution, or to the views of the federal head, voted at the
will of that head ; and, together with the stock-holding
members, could always make the federal vote that of the
majority. By this combination, legislative expositions
were given to the Constitution, and all the administra-

174 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

tive laws were shaped on the model of England and so
passed." ^

Although this full account of the affair was not written
until long after the events related, it must not be thought
that Jefferson kept his opinion concerning the methods of the
funding group to himself during the transaction. On the
contrary he was at great pains to impress his view upon
the President. "I said [to Washington]/' wrote Jefferson,
in 1792, "that the two great complaints were, that the na-
tional debt was unnecessarily increased, and that it had
furnished the means of corrupting both branches of the
legislature ; that he must know and everybody knew, there
was a considerable squadron in both, whose votes were
devoted to the paper and stock jobbing interest, that the
names of a weighty number were known, and several others
suspected on good grounds. That on examining the votes
of these men, they would be found uniformly for every
Treasury measure and that as most of these measures had
been carried by small majorities, they were carried by these
very votes. That, therefore, it was a cause of just un-
easiness when we saw a legislature legislating for their own
interests, in opposition of those of the people. He said not
a word on the corruption of the legislature, but took up the
other point, defended the Assumption, and argued that it
had not increased the debt, for that all of it was honest
debt." 2

At a later date, Jefferson again brought up the matter in a
private conversation with President Washington and of this
conference, he wrote: "I confirmed him [Washington] in
the fact of the great discontents to the South, that they
were grounded on seeing that their judgments and interests

» Works (Washington ed.), Vol. IX, pp. 91 ff.

» JefiFerson, Works (Washington ed.), Vol. IX, p. 117.

SECURITY HOLDING AND POLITICS 175

were sacrificed to those of the Eastern states on every occn.
and their belief that it was the effect of a corrupt squadron
of voters in Congress at the command of the Treasury, and
they see that if the votes of those members who had an in-
terest distinct from and contrary to the general interest of
their constts. had been withdrawn, as in decency and honesty
they should have been, the laws would have been the reverse
of what they are in all the great questions." ^

From Jefferson's day to this, students of history have
wondered how much credence should be given to the rumors
of Maclay and the allegations of Jefferson and his partisans
concerning the "paper men."^ Writers have given weight
to them or discounted them according to their predilections,
but no one seems to have taken the trouble to attempt a
verification or refutation of them from the records of the
Treasury Department, where, for nearly a hundred years,
the books of the early fiscal administration have lain covered
with accumulating dust.

As everyone knows, under the funding system set up by the
new government, nearly all holders of old paper brought
their securities to the Treasury or to the loan offices of their
respective states to be transformed into new certificates of

1 Writings (Ford ed.), Vol. I, p. 215.

» Although the critics of the Federalist administration usually refrained from
bringing charges of personal interest against Washington himself, the boldest of
them seem to have hazarded the suggestion that the President himself was not
above the private operations with which members of the legislature were all too
commonly associated. Jonathan Dayton, whose speculations in lands and securi-
ties were notorious throughout the country, in a letter of September 15, 1796,
to Oliver Wolcott, Secretary of the Treasury, urging him to make speedy provision
for the survey and location of lands selected for military donations according to an
act of Congress passed at the preceding session, observed concerning the critics of
the government : "I hear some of them remark with pain, that the President and
members have lands of their own to sell, or they would not be so neglectful in pro-
viding for the location of the military warrants, which then might come in competi-
tion with them. The fact as to many of us holding such lands being undeniable,
the imputation becomes from that circumstance more plausible, and enforces the
necessity on the part of our government to defeat, as soon as possible, the charge
of neglect." Gibbs, op. cit., Vol. I, p. 384.

176 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

indebtedness. If the Treasury records at Washington were
complete (unfortunately they are not) it would be possible
to discover the names of all those who funded public securi-
ties under the law of August 4, 1790, except perhaps those
represented by attorneys.

The incompleteness of the records makes it impossible,
however, to discover positively what members of Congress
did not have securities ; but the mass of material which re-
mains enables us to find a large number who did hold public
paper at the time of the funding of the debt. The exact
number cannot be ascertained ; but the evidence concerning
those who did hold securities is indisputable, unless we are
to assume that the members of Congress who appear on the
ledgers were attorneys for other parties.

The method of search by which the data below were se-
cured was as follows. The names of all the Senators and
Representatives of the first Congress were taken in alphabeti-
cal order and a search for each name was made among all
the old books in the Treasury Department. When the
search was finished, the names of all security holders were
starred. Not until this was done was an inquiry made into
the way in which the several members voted on Hamilton's
fiscal measures. Thus an attempt was made to eliminate
all bias which might have led to oversights in particular
cases. When a member of Congress is put down as not
holding securities, it is to be understood, therefore, that this
may be an error due to the incompleteness of the records or to
an oversight by the present writer.

That the percentage of error is not high, however, seems to
be probable, in view of the geographical distribution of the
members not holding securities. They appear principally
from the South, where, it can be shown from the Treasury
Books, the amount of public securities in the hands of resi-

SECURITY HOLDING AND POLITICS 177

dents was far smaller than in the Northern and Eastern
states.

The amount held by each member who appears on the
books is not set down here and the assumption is not made
that all security holders in Congress were at the same time
speculators. A number of them, particularly the Senators,
were vigorous speculators, but that is not the point. The
question at issue is the number of members of Congress who
were "disinterested" parties in the contest over the fiscal
measures of the new government.

The proposition to assume the state debts was taken up
in the House of Representatives in February, 1790, im-
mediately after the defeat of Madison's scheme for dis-
criminating between original holders and purchasers.^ In
March, it was carried in the committee of the whole house.
Maclay thus records the event : " Officers of Government,
clergy, citizens, (Order of) Cincinnati, and every person
under the influence of the Treasury; Bland and Huger
carried to the chamber of Representatives — the one lame,
the other sick ; Clymer stopped from going away, though
he had leave, and at length they risked the question, and
carried it, thirty-one votes to twenty-six. And all this
after having tampered with the members since the 22d of
last month (February), and this only in committee, with
many doubts that some will fly off and great fears that the
North Carolina members will be in before a bill can be
matured or the report gone through." ^

As Maclay predicted, the North CaroHna members shortly
afterward put in their appearance. On April 12 the assump-
tion plan was defeated in the House by a vote of thirty-one
to twenty-nine. Maclay was in great glee over the outcome
of the struggle, and he recites how Fitzsimons "endeavored

> Annals of Congress, Vol. II, p. 1355. ' Op. cit., p. 176.

178 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

to rally the discomfited and disheartened heroes" and ex-
pressed the behef that reconsideration and adoption were
not yet out of the question. At this, says the Pennsylvania
Senator, "the Secretary's group pricked up their ears and
Speculation wiped the tear from either eye. Goddess of
description, paint the gallery ; here's the paper, find fancy
quills, or crayons yourself." ^

Those whose tears were wiped away set to work to bring
over enough Southern representatives to carry the assump-
tion measure, in spite of the gloomy outlook. The way in
which the "innocent" Jefferson was undone by the "wily"
Hamilton and unwittingly used to bring about the exchange
of the capital for the assumption of state debts, on July 7,
is told in the account by the former cited above.^ Jefferson
informs us that "two of the Potomac members (White and
Lee, but White with a revulsion of stomach almost convul-
sive) agreed to change their votes and Hamilton undertook
to carry the other point." Daniel Carroll, a large property
holder in the region where the new capital was to be located,
also considerately changed his vote. Thus the bargain

1 Oj>. cit., p. 194. The reporter of the debates over the public credit notes that
"the galleries were unusually crowded" on Januarj' 28, 1790, and doubtless there
was a crowd on April 12. A gentleman in New York in a letter to a friend in Vir-
ginia, dated April 14, 1790, gave the following humorous description of the defeat
of assumption: "Last Monday Mr. Sedgwick delivered a funeral oration on the
death of Miss Assumption. . . . Her death was much lamented by her parents
who were from New England. Mr. Sedgwick being the most celebrated preacher
was requested to deliver her funeral eulogium. It was done with puritanic gravity.
. . . Sixty-one of the political fathers of the nation were present and a crowded
audience of weepers and rejoicers. Mrs. Speculator was the chief mourner, and
acted her part to admiration : she being mother of Miss Assumption who was the
hope of her family, the picture of herself, and her youngest child. Twenty-nine of
the political fathers cried aloud — Thirty-one bore the loss with fortitude, being
in full hope of a glorious resurrection. . . . Mrs. Excise may have cause to re-
joice, because she will be screened from much drudgery — as she must have been
the principal support of Miss Assumption, as well as of her mother and all her
relations. Mrs. Direct Tax may rest more easy in Virginia as she will not be called
into foreign service." Gazette of the United States, June 2, 1790.

' Above, p. 168.

SECURITY HOLDING AND POLITICS 179

whereby the capital was to be built on the Potomac and the
debts of the states were assumed by the federal government
was brought to a conclusion at a private dinner given by
Jefferson. The funding bill with the assumption amend-
ment was carried in the Senate on July 21, where the Treas-
ury had its most dependable vote.^ Three days later the
motion of Jackson, of Georgia, to disagree with the Senate
amendment, was defeated by a vote of thirty-two to twenty-
nine.^ It is this vote which is analyzed below.

The vote on the bill as passed by the Senate,^ in its
amended form, on July 21 was as follows :

Yeas : Langdon, New Hampshire Nays : Wingate, New Hamp-

Strong and Dalton, Mas- shire

sachusetts Foster and Stanton,

Ellsworth and Johnson, Rhode Island

Connecticut Bassett, Delaware

King and Schuyler, New Maclay, Pennsylvania

York Henry, Maryland

Paterson and Elmer, New Johnston and Haw-
Jersey kins, North Caro-

Read, Delaware Una

Morris, Pennsylvania Lee and Walker, Vir-

CarroU, Maryland ginia

Butler and Izard, South Few and Gunn, Georgia
Carolina [14] [12]

Of the fourteen Senators who voted in favor of the funding
bill, with the assumption amendment, on July 21, 1790, at
least ten, Langdon, Strong, Ellsworth, Johnson, King,
Schuyler, Read, Morris, Charles Carroll, and Izard, appear
upon the Treasury records as holders of public securities
at the time of the funding process.* To this list Pierce

» Annals of Congress, Vol. I, p. 1055. « Ibid., Vol. II, p. 1753.

' Ibid., Vol. I, pp. 1054-1055.

* For the holdings of Langdon, Strong, Ellsworth, King, Johnson, Schuyler,
Read, Morris, and Carroll, see Beard, Economic Interpretation of the Constitution,

180 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Butler doubtless should be added.^ Those not found on the
records are Dalton, of Massachusetts, and Elmer and Pater-
son, of New Jersey.^

Of the twelve who voted against the funding bill on
July 21, 1790, at least five, Maclay, Bassett, Johnston, Few,
and R. H. Lee, were holders of public debt, but the holdings
of Maclay, Bassett, and Few were trivial in amount.^ The
names of seven Senators who voted against funding, Win-
gate, Stanton, Foster, Henry, Hawkins, Walker, and Gunn,
were not found on the Treasury records.

A table built upon this data would run as follows :

Security holders Non-holders

For the funding bill 11 3

Against the bill _5_ 7

Total, 26 16 10

A study of the Treasury records shows that the Senators
who held securities and voted for the funding bill were, with
one or two exceptions, among the large holders of public
paper, and that the Senators of the same class who voted
against the bill (with the possible exception of Johnston of
North Carolina) were among the minor holders.

Even a superficial examination of the vote in the Senate is
interesting in view of the party divisions which soon ensued.
The "Eastern" states were almost solid for the bill. New
Hampshire was divided ; but Massachusetts, Connecticut,

Chap, v.; for Izard, see "Loan Office: S. C, 1790," p. 17. Ellsworth moved
assumption in the Senate saying that "the influence of every class of creditors
should be united." Paterson Papers, Bancroft Mss., New York Public Library.

» Economic Interpretation, p. 82. After the publication of this work I found
Pierce Butler's name on the "Index to the Registered Debt," which I believe
was the debt at the Treasury itself, the records of which are largely missing.

• The name of William Paterson appears on the New Jersey records for a small
amount, but it is not possible to identify this security holder with the Senator.

' For Few and Bassett, see Economic Interpretation, Chap. V. ; R. H. Lee,
"Virginia: Index to Loans" ; Maclay, "Loan Office: Penna., 1790-1791," pp. 117,
118; Johnston, "Loan Office: N.C., 1791-1797," pp. 1, 40.

SECURITY HOLDING AND POLITICS 181

New York, and New Jersey were unanimous. The financial
centres of Portsmouth, Boston, Hartford, New York,
Philadelphia, and Charleston were correctly represented.

Equally significant is the vote against the bill. Seven of
the twelve votes in opposition came from Southern states.
Virginia, North Carolina, and Georgia were solid against it.
These were the states (particularly Georgia and North Caro-
lina) in which the debt had been so largely bought up by
speculators.^ Only one of the votes against the bill came
from north of Pennsylvania : Wingate of New Hampshire
refused to join his colleague, Langdon, in support of the
measure.

The vote in the House of Representatives, on July 24, on
the proposition to disagree with the Senate amendment to
the funding bill providing for the assumption of state debts
stood twenty-nine to thirty-two. A study of this vote in
the light of the Treasury records is informing and it seems
best to take members up seriatim, beginning with New
Hampshire.

The delegation of New Hampshire was divided on assump-
tion. Nicholas Gilman and Samuel Livermore were against
it, and Foster (of Rockingham county) voted in favor of it.
As measured by the interest disbursements in 1795,^ New
Hampshire stood tenth in the amount of federal securities
held by her citizens, and there was a strong opposition to
assumption in that commonwealth. Livermore, in voting
against it, said that he would only approve the proposition in
case it was agreed merely "to assume the balances found to
be due to the creditor States, upon the final adjustment and
liquidation of the accounts between the United States and
the individual States." ^ Of the three New Hampshire

1 See below, pp. 191, 193.

' An Account of the Receipts and Expenditures of the United States for the Year
1795, p. 65. » Annals of Congress, Vol. II, p. 1412.

182 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Representatives, one, Nicholas Oilman,^ was found among
the holders of public paper, and he voted against as-
sumption.

The eight Representatives of Massachusetts in the House
voted solidly in favor of assumption. Of these, Ames, Gerry,
Grout, Leonard, Partridge, and Sedgwick, at least six, appear
as security holders on the loan office books of Massachusetts.^
As measured in the interest disbursements of 1795, that state
stood second in the amount of securities held by her citizens,
and the weight of the state debt which was transferred to
the federal government was so great that Massachusetts
taxpayers, as well as security holders, felt a great relief
when the burden was shifted. Mr. Sedgwick doubt-
less expressed the sentiments of all his colleagues when he
said, on February 24, that assumption "will terminate
in the suppression of direct taxes ; it will abolish invidious
distinctions between States and their citizens ; it will fix the
value of State securities, and bring them into operation as
a circulating medium." '

Connecticut cast her five votes solidly in favor of assump-
tion. Of her five members in the House, at least four,
Sherman, Sturges, Trumbull, and Wadsworth, appear
among the holders of public securities on the loan office books

1 Beard, Economic Interpretation, p. 93.

* Consult indexes to the 6 per cent deferred stock and the 3 per cent stocks
in Massachusetts collection in the Treasury Department ; for Gerry, see Eco-
nomic Interpretation, p. 95.

* Annalsof Congress, "Vol. II, p. 1386. Fisher Ames was anxious to relieve Massachu-
setts. On January 13, 1790, he wrote: "I think the assumption will be a serious
article of our business in Congress. I wish, from our state, co-operation, not re-
sistance. Our people pay great taxes. In this [New York] and every other state,
they are more moderate. They have not raised twenty-five thousand pounds in
this state these three years. Their dry taxes are very trifling. Why should our
industrious people be crushed, to pay taxes to maintain state credit, and without
maintaining it, too, when the United States by excises, <fec. equally imposed, can
do it effectually? Will they love their fetters so well as to contend against the
hand that would set them at liberty?" The Life and Works of Fisher Ames,
Vol. I. p. 72.

SECURITY HOLDING AND POLITICS 183

of Connecticut.^ That state, though reckoned among the
smaller commonwealths, stood fifth in the amount of se-
curities held by her citizens, as measured by the interest dis-
bursements of 1795. Not only was the amount of the state
debt considerable ; but it was widely distributed among the
various towns. This fact is proved by the records in the
Treasury Department.^ Moreover, Sherman confirms this,
for during the debates in the House on March 1, he said :
''The circulation of the revenue would be very agreeable
to the greater proportion of the inhabitants; because the
evidences of the State debts were generally in the hands of
the original holders. He had made particular inquiry into
this circumstance, and so far as it respected Connecticut, he
was led to beheve it was true of nineteen-twentieths. There
were one hundred thousand dollars in specie in the hands
of the original holders in the very town in which he lived.
He beHeved very little besides the army debt had been trans-
ferred in that State ; and even of the army debt, it was only
that portion which fell into the hands of the soldiers. " ^

New York was evenly divided on assumption. Benson and
Lawrence, who "ably represented the southern districts of
New York," ^ voted in favor of the proposition, and to their
votes was added the vote of an up-state Representative,
Peter Sylvester. Of the three, Lawrence was a security
holder, and among the large operators in pubHc stocks in
New York.^ He was also deeply interested in the first
United States Bank and was on the first board of directors.®

1 Consult Indexes to the Loan Office Books of Connecticut in the Treasury
Department. For Sherman, see Economic Interpretation, p. 143.

* See map in Economic Interpretation, p. 265.
' Annals of Congress, Vol. II, pp. 1440-1441.

* Hildreth, History of the United States (Second Series), Vol. I, p. 43.

« New York Loan Office Books in the Treasury Department, and State Papers :
Finance, Vol. I, p. 165.

« Dunlap's Daily Advertiser, October 22, 1791.

184 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Jefferson records Benson in his list of paper men on hearsay/
but an examination of the records in the Treasury Depart-
ment failed to reveal his name. Sylvester does not seem to
have been interested in public paper on his own account.
Of the three New York Representatives who voted against
assumption, two, Floyd and Hathorn, were not found among
the security holders ; but Van Rensselaer appears on the
New York loan office records.^

New Jersey had four Representatives in the House and all
of them voted in favor of assumption. Of this group, at
least three, Boudinot, Schureman, and Sinnickson, were
security holders.^ Boudinot seems to have been the spokes-
man of the New Jersey delegation, but he did not participate
extensively in the debate on assumption. He was warmly
moved by Madison's proposition to discriminate between
original holders and speculators and pleaded with his fellow-
members to come to the support of the pubhc credit in the
following passionate strain: "Humanity, as well as justice,
makes this demand upon you ; the complaints of ruined
widows, and the cries of fatherless children, whose whole
support has been placed in your hands, and melted away,
have doubtless reached you. Rouse, therefore; strive
who shall do most for his country ; rekindle that flame of
patriotism which, at the mention of disgrace and slavery,
blazed throughout America, and animated all her citizens."*

The single vote of Delaware is recorded in favor of assump-
tion ; but Representative Vining does not seem to have
been a security holder and citizens of that state held only a

» Writings (Ford ed.), Vol. I, p. 223, note 1.

» "Loan Office: New York, Ledger" (no. 32), fol. 104.

'For Boudinot, see "Penna. Loan Office, 6% Stock, Ledger A," fol. 24, and
Jefferson, Writings (Ford id.), Vol. I. p. 223. For Schureman, "N. J. Loan Office,
3% Stock, Ledger C." fols. 84, 122 ; for Sinnickson, ibid., fol. 91 ; Rebecca
Cadwalader appears on ibid., fols. 83, 127.

* Annals of Congress, Vol. I, p. 1176.

SECURITY HOLDING AND POLITICS 185

small amount of paper from the local loan office. Maclay
records, as we have seen, among his rumors a statement to
the effect that Senator Butler heard a man say that he would
give Vining one thousand guineas for his vote on assumption,
but such rumors, unsubstantiated by other evidence, de-
serve little or no credence.^

Three members of the House from Pennsylvania, George
Clymer, Thomas Fitzsimons, and Henry Wynkoop, voted in
favor of assumption, and the first two were among the largest
speculators and operators in securities in Philadelphia.^
Wynkoop was not found among the security holders, and he
seems to have hesitated awhile before casting his vote with
the Philadelphia members. Maclay records, April 1, 1790 :
"I took an opportunity of speaking to Mr. Wynkoop. I
was pointing out some inconveniences of the assumption.
I found he seemed much embarrassed. Lawrence and
Benson^ had got him away from his usual seat to near where
they commonly sat. He paused a little ; got up rather
hastily ; said, ' God bless you ! ' went out of the chamber,
and actually took his wife and proceeded home to Phila-
delphia." ^ He returned in time however to cast his vote
with Benson and Lawrence for assumption.

Four Pennsylvania Representatives voted against assump-
tion, Hartley, Heister, Peter Muhlenberg, and Thomas
Scott — the last being "from the settlements beyond the
Alleghanies." Of this group, Daniel Heister appears to
be the only security holder on the books. ^

The manager of the Pennsylvania delegation in the House

' The collection of the Delaware Loan Office in the Treasury is meagre indeed.
Maclay, Sketches, p. 176 (date of March 9, 1790). Vining married the daughter of
Seton, Hamilton's public and private agent in New York.

* Economic Interpretation, pp. 83, 91.
' See above, p. 183.

* Journal, p. 228.

'" Index to Pa. Loan Office Books, Loan of 1790." ...>.••-•

186 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

was Robert Morris, then in the Senate.^ In that remarkable
group of pen pictures of the negotiations over the funding of
the debt drawn for us by Maclay we find always in the
foreground the portly figure of this distinguished Senator,
the mighty speculator and manipulator. Maclay records
that on June 9, 1790, Morris "blazed away for six per cent
on the nominal amount of all pubhc securities. Ellsworth
answered want of ability. Mr. Morris made nothing of the
whole of it. The broadside of American was able enough
for it all. We had property enough, and he was for a land
tax; and if a land tax were laid, there would be money
enough." ^ When the committee of the Senate reported in
favor of a rate of only four per cent on the debt, "Mr. Morris
rose against the report. His choler fairly choked him. He
apologized to the House that his agitation had deprived him
of his recollection on the subject, and he sat down. He
rose again some little time before the Senate adjourned;
mentioned his late confusion, but declared it did not arise
from the personal interest he had in public securities ; that'
although he was possessed of some, he was no speculator,
&c., &c." '

1 " We hear no more about the injustice of the assumption. . . . This looks
like coming over. Besides, consequences are feared. The New England states
demand it as a debt of justice, with a tone so loud and threatening, that they fear
the convulsions which would probably ensue. Further, they are going to fix the
residence permanently on the Potomac, and by the apostacy of Pennsylvania will
do it, removing, however, immediately to Philadelphia, and staying there ten
years. Two such injuries would be too much. They dare not, I trust, carry
Congress so far South and leave the debts upon us. R. Morris, too, is really warm
for the assumption, and as he is the factotum in the business, he will not fail to insist
upon the original friends of it, and who have ever been a majority, voting for it.
With five Pennsylvanians, our former aid from that delegation, we can carry it,
or at least obtain four-fifths of the debts to be assumed. Accordingly they begin
to say, these violent feuds must be composed ; too much is hazarded to break up
in this temper. Maryland is the most alarmed as well as, next to Virginia, most
anxious for the Potomac. I am beginning to be sanguine in the hope of success."
Life and Works of Fisher Ames, Vol. I, p. 84 (June 27, 1790).

« Maclay, Sketches, p. 222 ; Maclay's statement is corroborated by Paterson,
Paterson Papers (Bancroft Transcripts, New York Public Library), p. 409.

» Ibid., p. 228.

SECURITY HOLDING AND POLITICS 187

Notwithstanding this discomfiture, it seems that Morris
continued to fight vahantly for funding the whole debt at
the rate of six per cent interest. According to Maclay,
Morris, on July 13, "said openly, before the Senate was
formed, / am for a six per cent fund on the whole; and if
gentlemen will not vote for that, I will vote against the assump-
tion. I thought him only in sport then. But he three
times in Senate, openly avowed the same thing, declaring
he was, in judgment, for the assumption ; but if gentlemen
would not vote for six per cent, he would vote against the
assumption and the whole funding bill. , . . Izard got up
and attacked him with asperity." ^ It was apparently only
with great difficulty that Morris could bring himself to
accept the funding bill on any other basis, but he yielded at
length on July 20. Of his surrender, Maclay says: "Mr.
Morris having often threatened that he would vote against
the bill, at last made this remarkable speech : Half a loaf
is better than no bread. I will consent to the bill on behalf of
the public creditors, for whom I am interested (I looked up at
him, and he added), as well as for the rest of the Union.
This last shed some palliation over his expressions." ^

1 Maclay, Sketches, p. 247.

' Ibid., p. 256 ; see also Paterson's notes on the debates in the Senate, Bancroft
Transcripts, New York Public Library. Morris was personally interested in every
important economic operation of the Federal government. He was a large security
holder ; he was a large holder of Bank stock ; and he engaged vigorously in specu-
lation in Washington lots when the location of the capitol was decided upon. The
following letter gives some idea of his Washington interests, but unhappily for him
they did not turn out so well as he expected: "Our interest there [Washington,
D.C.] is a deep and promising affair. We have lately sold 500 lotts for five pence
currency per square foot, each lot 5265 feet, and for ready money which we have
received, and further we have just concluded another sale to the amount of
£20,000 Cy at the same price . . . and we are in treaty for lotts to the amount
of £40,000 more, which I think, will succeed at 6d. or 7d. per square foot. Single
lotts sell at 8d., 9d., lOd., and 12d. per foot according to circumstances and posi-
tion so that you see we shall wind up well, especially as the purchasers are obliged
to build a house on every third lott." Private Letter Book, Vol. I, p. 89. Letter
to Willink, March 16, 1795. From 1790 until his failure, Morris had large finan-
cial connections with members of Congress and prominent politicians all over the

188 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

As we move southward we find the opposition to assump-
tion and the funding system steadily increasing (if we except
South CaroUna, where the security operations were consid-
erable, particularly among the Charleston Federalists).
The Maryland delegation was seriously divided. Only two
Representatives from that state voted in favor of assumption
when the test vote was taken on July 24 — Daniel Carroll
and George Gale, both of whom were security holders.^
Carroll voted against assumption at first, but was induced
to change his view during the negotiations over the location
of the capital.^ He was of the inner circle which traded
assumption for the capital ; he was somewhat interested in
pubhc paper ; and he had the satisfaction of helping to en-
gineer the laying out of the city of Washington in such a
manner as to give an immense appreciation to the value of
his farm lands in the vicinity.'

Of the four Maryland Representatives who voted
against assumption, Stone and WilUam Smith appear

United States. He owed Lambert Cadwalader's sister money and Cadwalader
carried on the negotiations {Private Letter Book, Mss. in the Library of Congress,
Vol. I, pp. 172, 773). Morris tried to get Tristram Dalton, Senator, of Massa-
chusetts to go his security on two notes of $16,000 and S17,000 (ibid.. Vol. II,
p. 134). Philemon Dickinson, of New Jersey, tried to sell lands to Morris but the
latter was not able to buy at the time (ibid.. Vol. I, p. 67). John Drayton, of
Charleston, tried to sell land to Morris (ibid.. Vol. I, p. 302). Morris was engaged
in land negotiations with Thomas Hartley, a Representative from Pennsylvania
(ibid.. Vol. I, p. 459). Morris was engaged in extensive operations with Thomas
Fitzsimons, member of the Convention and of the House of Representatives
(see indexes to Private Letter Books). Morris had 165 shares of Columbia Bank
stock (ibid.. Vol. I, p. 49). He also had one block of 330 shares of United States
Bank stock (ibid.. Vol. I, p. 57). Gouverneur Morris, diplomatic representative
of the United States at Paris, carried on European operations for Robert Morris
(ibid.. Vol. I, p. 15). Robert Morris had considerable business dealings with
Richard Bland Lee (ibid.. Vol. I, pp. 31, 59). Morris bought and sold bank stock
for John Marshall, of Virginia (ibid., indexes under John Marshall). Marshall's
brother, James, married Morris' daughter. Wade Hampton, of South Carolina,
had connections with Morris (ibid.. Vol. I, p. 95.)

* Economic Interpretation, p. 82; ".Alphabet Dividend Book" in the Loan
Office records of Maryland in the Treasury Department.

'Jefferson, Writings (Ford ed.), Vol. I, p. 164, note 1.

* H. Crew, History of Washington, p. 168.

SECURITY HOLDING AND POLITICS 189

among the security holders/ but Seney and Contee were
not found.

The weight of the Virginia delegation in Congress was
thrown against assumption from the beginning of the eon-
test, and apparently the vote would have been solid against
it at the end had it not been for the famous bargain whereby
Alexander White and Richard Bland Lee changed their
votes and bought the capital at the cost of assumption.^
The "Index to the Virginia Loans," preserved in the Treas-
ury Department, shows only John Brown of Richmond
among the security holders, and Brown was among the seven
Virginia Representatives who voted against assumption.
The two members who at last gave their reluctant consent
to the scheme do not seem to have been holders of public
paper.

As measured by interest disbursements in 1795 Virginia,
in proportion to her population, stood surprisingly low in
the amount of securities held by her citizens. Massachusetts
citizens received from the federal government in that year
$309,500 and Virginia citizens received only $62,300. In
fact, Massachusetts, Connecticut, New York, Pennsylvania,
Maryland, and South Carolina stood above Virginia in the
list. The "Loan Office: Register of Subscriptions" (for
1791) now in the Treasury Department shows that of the
total £500,307 15s. lOd. worth of Virginia certificates pre-
sented for funding only a small amount was in the hands of
the original holders. The major portion had been bought
up by brokers and speculators in Virginia towns and in
Baltimore, New York, Philadelphia, and other financial
centres. Among the larger operators in Virginia paper
were Thomas WilHng (the partner and agent for Robert

* "Alphabet Dividend Book," as above cited.

'Jefferson, Writings (Ford ed.), Vol. I, p. 164. Theodorick Bland, of the
Virginia delegation, died before the final vote.

190 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Morris and first president of the first United States Bank)
and LeRoy and Bayard of New York City. This large
foHo volume would repay detailed examination by any one
attempting to penetrate into the origins of high finance in
the United States.

The entire delegation from North Carolina in the House of
Representatives voted against assumption. Maclay informs
us that on March 26 the Pennsylvania group had induced
Williamson and Ashe from North Carolina to change their
minds/ but for one reason or another they reverted to their
first view. Of the five members from that state on record
against assumption, only one, Williamson, seems to be
entered among the security holders.^ It would appear that
he was inclined to support assumption, but yielded to the
great pressure of his constituents and colleagues.

North Carolina stood third from the bottom of the list
in the amount of securities held by her citizens, as measured
by the interest disbursements of 1795 ($3200). The books
of the North Carolina loan office preserved in the Treasury
Department explain how this result had been brought
about. Speculators from Northern cities appear on nearly
every page of the ledgers as purchasers of the certificates
from original holders. Thus it happened that North
Carolina paper was not only taken out of the hands of widely
scattered holders, who might otherwise have given their
weight to the funding system, but it was concentrated in
the hands of brokers in cities in other states.'

In fact, it was the action of Northern brokers (particularly
from New York City) in buying up the securities of North
Carolina, as well as those of Georgia and South Carohna,

• Journal, p. 224.
' Economic Interpretation, p. 146.

»See particularly the "Journal of Assumed Debt." Richard Piatt, of New
York, for example, had $192,723.14 worth.

SECURITY HOLDING AND POLITICS 191

which made many Southern opponents of assumption so
bitter in their denunciation of Hamilton's proposals. Very
early in the debate on the report of the Secretary of the
Treasury, Mr. Jackson, of Georgia, exclaimed with evident
feehng: "Since this report has been read in this House, a
spirit of havoc, speculation, and ruin, has arisen, and been
cherished by people who had an access to the information
the report contained, that would have made a Hastings
blush to have been connected with, though long inured to
preying on the vitals of his fellow men. Three vessels, sir,
have sailed within a fortnight, from this port, freighted for
speculation ; they are intended to purchase up the State and
other securities in the hands of the uninformed, though
honest citizens of North Carolina, South CaroHna, and
Georgia. My soul rises indignant at the avaricious and im-
moral turpitude which so vile a conduct displays." ^

One of the features of the federal Constitution which the
North CaroUna delegates to the Philadelphia Convention of
1787 had pointed out as an inducement to their fellow-citi-
zens to ratify that instrument was the provision requiring
the apportionment of land and capitation taxes which that
state, whose wealth was in real property and slaves rather
than personalty in general, had reason to fear. And this
very danger of a direct tax, which the assumption process
might involve, caused a leading representative from that
commonwealth, Mr. WilHamson, to speak of that matter in
the House while the assumption was under discussion : "He
observed that his fellow-citizens in North Carolina were not
in general rich, few of them so provident as to lay up money ;
for this reason, while he was entrusted with their concerns,
he should oppose every measure that looked towards direct
taxation. He wished never to see the day, when to satisfy

1 Annals of Congress, Vol. I, p. 1132.

192 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

a land tax, or a capitation tax, a poor man's cow or horse
might be taken from him, on which he depended for the
support of helpless children. Let the State debts be once
assumed and you must proceed, if your calculations are
bad . . . and the impost and excise does not come up to
your expectations, the national honor must be preserved.
. . . People would not readily be reconciled to the new
creed, * that the debts lately paid are State debts, but all the
debts not paid are National debts,' especially as this dis-
covery is made after most of the certificates have changed their
original holders, and have passed for a trifle into the hands of
moneyed men. . . . One obvious benefit will arise from
this sudden adoption [of assumption]. A few men who
chanced to be near the seat of Government, and first pos-
sessed of the scheme, flew to Carolina, and there bought up
securities at 3s. in the pound ; those men will be liberally
rewarded, while his unfortunate fellow-citizens are left to
pay a second tax for the same object, and to complain of the
injustice of Government." ^

South Carolina was divided on assumption. For it voted
Burke, William Smith, and Tucker, all of whom appear on
the records of the loan office of that state as holders of public
paper.^ Only Thomas Sumter voted against assumption,
according to the Annals of Congress; the name of Huger,
the other South Carolina member, does not appear there.
A search in the Treasury records fails to -reveal either Sum-
ter or Huger among the holders of public paper. South
CaroHna stood third from the top of the list in the amount

' Annals of Congress, Vol. II, pp. 15.39 ff. Italics mine.

'For Burko, snc Treasury Department, "Loan Office, S.C, 1791-1797," p.
266; for Smith, ihid., p. 45 (811,910.70 worth) ; and for Tanker, ibid., volume for
1790, p. 167. Jefferson wrote in the margin of the Anas (but struck it out later),
"I do not know any member from South Carolina ensagcd in this infamous busi-
ness, except William Smith, whom I think it a duty to name therefore, to relieve
the others from the imputation." Writings (Ford cd.), Vol. I, p. 162, note.

SECURITY HOLDING AND POLITICS 193

of federal debt held by her citizens, with only New York and
Massachusetts ahead.

The Georgia Representatives went solidly against assump-
tion. Of the three members composing the delegation,
Baldwin, Jackson, and Matthews, only the first appears to
have been a holder of public paper. A part of Baldwin's
holdings was in the state paper of Connecticut, and it seems
that he also held some continental paper.^

The amount of securities held in Georgia by the original
owners was almost negligible. Mr. Jackson, in one of his
vehement speeches against assumption, declared, "I do not
believe that there are twenty original holders in Georgia ;
the original holders received no interest, nor did they expect
any ; they parted with the certificates as they stood, with-
out interest ; the speculators now hold them, and contrary
to the tenor of the certificates, the intention of the State,
and the contract they made, they will be allowed interest." ^
In the interest disbursements of 1795 Georgia received only
$6800 as contrasted with $367,600 for New York. The
Treasury records of the Georgia loan office also show that
Jackson's statement was fairly accurate.

A collective view of the data here presented yields the
table ^ shown on page 194.

The temptation to draw too many conclusions from the
data here presented and from the table below should be
resisted. The one conclusion which is indisputable, how-
ever, is that almost one-half of the members of the first
House were security holders. This may account partially
for the defeat which overwhelmed Madison's proposal to

' Economic Interpretation, p. 75. ' Annals of Congress, Vol. II, p. 1751.

» The Constitution made provision for 65 members of the House of Repre-
sentatives. Sixty-one votes were cast on the assumption proposition. The four
not recorded were Speaker Muhlenberg, Bland, of Virginia, Huger, of South
Carolina, and the Rhode Island representative.

194 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

STATES

NUMBER OP
MEMBERS IN
THE HOUSE

FOR AS-
SUMPTION

AGAINST AS-
SUMPTION

SECURITY
HOLDERS
rOR AS-
SUMPTION

SECURITY-
HOLDERS VS.
ASSUMPTION

New Hampshire

Massachusetts .

Connecticut . .

New York .

New Jersey

^Delaware .

Pennsylvania

Maryland .

Virginia

North Carohna .

South Carolina .

Georgia . . .

discriminate between original holders and the speculative
purchasers — thirty-six to thirteen.^ This certainly justi-
fies Jefferson's assertion that had those actually interested
in the outcome of the funding process withdrawn from vot-
ing on Hamilton's proposals not a single one of them would
have been carried.

But it should be observed that had the security holders
abstained from voting on assumption, the decision of the
matter would have been left to what Jefferson called "the
agricultural representation," speaking for the taxpayers on
whom the burden of taxation for the support of public credit
principally fell. The great financial centres would have
been left without any representation. Whether this would
have been intrusting the delicate matter of public credit to
purely "disinterested" representatives may be left to the
imagination of the reader.

• Above, p. 146.

SECURITY HOLDING AND POLITICS 195

Finally, it should be noted that quite a number of security
holders voted against assumption and contrary to their
personal interest; and an examination of the vote with
reference to the geographical distribution of the public
securities would seem to show beyond question that nearly
all of the members, security holders and non-security holders
aHke, represented the dominant economic interests of their
respective constituencies rather than their personal inter-
ests. In many instances there was, it is evident, a singular
coincidence between public service, as the members con-
ceived it, and private advantage ; but the charge of mere
corruption must fall to the ground. It was a clear case of
a colHsion of economic interests : fluid capital versus
agrarianism. The representation of one interest was as
legitimate as the other, and there is no more ground for
denouncing the members of Congress who held securities
and voted to sustain the pubHc credit than there is for
denouncing the slave-owners who voted against the Quaker
memorials against slavery on March 23, 1790.^

By way of conclusion, one is moved to conjecture what
kind of government could have been established under the
Constitution, if there had been excluded from voting on the
great fiscal measures all "interested" representatives, and
the decision of such momentous issues had been left to those
highly ethereaUzed persons who "cherished the people" —
and nothing more.

» Annals of Congress, Vol. II, p. 1623.

CHAPTER VII

THE ECONOMIC CONFLICT AS REFLECTED IN REPUBLICAN

LITERATURE

One does not have to examine many newspapers and
pamphlets of the period between the inauguration of Wash-
ington and the election of Jefferson to discover that contem-
porary writers entertained very decided notions as to the
economic character of the issues which divided the country
into two parties. Of course, there was a great deal of
calumny employed on both sides, and religious and theoreti-
cal questions were brought into play, but the more temper-
ate and thoughtful of the combatants were unusually pains-
taking in their efforts to point out the economic lines along
which the contest was waged. Indeed, so many writers
dwelt upon the economic aspects of the conflict that the
student is embarrassed with the riches at his command.^

1 For important Anti-Federalist pamphlets see J. T. Callender, Sedgwick Sb Co.,
or a Key to the Six Per Cent Cabinet (1798), and by the same author, The Prospect
Before Us (1800-1801) ; The Hcnorable Mr. Sedgwick's Political Last Will and
Testament (1800) in the New York Public Library ; William Findley, Review of the
Revenue System Adopted by the First Congress under the Federal Constitution (1794),
in the Library of Congress ; Definition of Parties or the Political Effects of the Paper
System Considered (Philadelphia, April 5, 1794), in the New York Public Library;
Abraham Bishop, Connecticut Republicanism (New Haven, 1800), in the Columbia
University Library ; Charles Pinckney, Speeches (1800), in the Library of Congress ;
W. Duane, Politics for American Farmers (Philadelphia, 1807) ; B. Austin, Consti-
tutional Republicanism in Opposition to Fallacious Federalism (Boston, 1803) ;
for some of John Taylor's letters see Miscellaneous Pamphlets in the Library of
Congress, Vol. 731, Number 10. See, of course, the great Republican newspaper,
The Aurora. The newspapers in the rural regions were the chief support of the
Republicans. "The greatest evil which pervades our country," wrote David Lord,
of Morristown, New Jersey, to Hamilton in 1798, "is the country press — these
have been, many of them, set up and supported by the Democratic party in dif-
ferent places, and those not actually raised by their private collections of money,

196

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 197

The pamphlet Hterature is very large and the newspapers are
filled with letters and articles discussing the economic features
of the conflict between the Federalists and Republicans.

Perhaps, the most vigorous and systematic presentation
of the lines of the Republican attack on the administration
is to be found in John Taylor's An Examination of the Late
Proceedings in Congress Respecting the Official Conduct of the
Secretary of the Treasury, printed in 1793, and in his Inquiry
into the Principles and Tendencies of Certain Public Meas-
ures, printed the following year.^

In the first of these pamphlets, Taylor opened with a
commentary on the natural tendency of federal govern-
ments to escape from public responsibility and of the several
departments of government, designed to check one another,
to fuse into one sovereignty. But the real source of the
consolidation of the administration party under Washing-
ton's first term was the public debt. "A charm has been^
formed," he said, "of sufficient strength to draw them [the
executive and legislature] together, if the repulsive power
had been naturally ten times greater than the attractive one
really is. An immense debt has been accumulated, from
every region of the union and of every possible description, *
constituted into funds of almost perpetual duration, and
subject from its nature upon the slightest incidents to
constant fluctuation, with a power in the Secretary of the
Treasury, through the medium of the sinking fund to raise >^

have been as it were seized or hired by the party to retail scandal against the
government so that 9 tenths of the Presses out of the great towns in America
south of the Hudson are Democratic and most of them by direct pay or by influence.
While the opposers of the government are doing all this and ten times as much by
misrepresentation, the wealth, information and abilities of our country are not ex-
cited at all or very little indeed." Hamilton Mss., April 11, 1798. See also
Freneau's writings and S. E. Forman's valuable essay on Freneau, in the Johns
Hopkins Studies.

1 Copies of both of these pamphlets may be found in the New York Public
Library.

198 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

"^ it at pleasure. [It has depended upon the Secretary to say
when money could or could not be furnished for the sinking
fund, out of the funds appropriated for the purpose, and
even out of monies borrowed for and legally appUcable to
no other purpose. And under his direction has ultimately
fallen the execution of the purchases.]^ And upon the basis
of this debt, a bank of discount has been formed, aUied by
its charter to the government itself, and in a great measure
subjected to the direction of the same officer."

The holders of public debt were naturally and easily
consolidated into a party based upon identical interests.
"The experience of other countries has shewn," continued
Taylor, "that the dealers in the pubUc funds, and especially
those whose fortunes consist principally in that line have no
interest and of course feel but little concern in all those ques-
tions of fiscal poHcy which particularly affect the landholder,
the merchant, and the artist [artisan.] Although these
classes should groan under the burdens of government, yet
the pubHc creditor will be no otherwise affected by the
pressure, than as he receives what has been gleaned from
their industry. . . They are the tenants of the farm, he the
landlord and the man of revenue. The disparity of their
interests, and the difference of their sensations, respecting
the objects to which they point, in a great measure separate
them in society."

Taylor then analyzed the psychology of the security

holders and found why they were such a readily consolidated

Vgroup. "Knowing that they live upon the labour of the

other classes, the public creditors behold them with jealousy,

^ suspect a thousand visionary schemes against their welfare,

' and are always alarmed and agitated with every [sic] the

most trifling incident which happens. And having one

1 Footnote in the original ; see above, p. 114.

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 190

common interest, which consists simply in the imposition
of high taxes and their rigid collection, they form a compact
body and move always in concert. Whilst the adminis-
tration finds the means to satisfy their claims, they are
always devoted to it, and support all its measures. They ^,^
therefore may be considered in every country, where substan-
tial funds are established and their demands are punctually
paid, as a ministerial corps, leagued together upon principles
to a certain degree hostile to the rest of the community." V

There were, however, in the United States exceptional
circumstances which made the security-holding party all
the more jealous of its interests and fearful of the populace.
"The trifling consideration given for the debt by the present
holders, with the comparative merit of their characters with
that of the officers and soldiers of the late army, and the
well known sense which the community entertain on that
subject, must inspire a distrust that will disquiet their peace
for a time. The claims of justice although from motives of
policy, they may be suppressed, yet the cries which they
raise are terrible to those who live on the usurpation. . . .
This throws them blindly into the hands of those who pat-
ronize their interests. In addition to which, the policy and
operation of the sinking fund, by which the rise of stocks is
in a great measure regulated, must contribute greatly to
subject the party interested to the control of those who
direct its application." ___^

Having demonstrated to his satisfaction that the security- \.
holding group constituted a class separate from the land-
holder, merchant, and artisan, and fully conscious of its
interests, Taylor proceeded to an analysis of the political
aspects of the banking and credit system. "The proprietors
of bank stock are still more subservient to this policy than ^
any other class of public creditors. The institution itself-

200 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

being founded on the same paper system must communicate
the same interest to those within its sphere. And in other
respects, it possesses a strength and energy to which the
common members of the fiscal corps are strangers. The
superiority of its gains invigorates the principle common to

i them all ; but the constitutional subordination to the head of
that department sanctifies under the cloak of authority, that
degree of subservience which a sense of shame, among inde-
^ pendent men, might occasionally forbid. The bank, however,
should not be considered simply in the light of an institution,
uniting together with greater force, the members of the fiscal
corps. As an engine of influence, capable under management
authorized by its principles, of polluting every operation of

Mhe government, it is entitled to particular attention."

V That certificate holders, dealers in funds, bank stock-
holders, and borrowers from the bank should become
attached to the Treasury administration was serious
enough, Taylor thought ; but what was to be said about
members of Congress who became personally interested in
the fiscal operations of the government whose policy the}'-

» were determining? Could they be expected to retain their
character as " representatives of the people " ? " Being on the
great theatre of speculation and gain and possessed of more
correct information, with the means of turning it to better
account, will they abandon their occupation and slight the
opportunity offered of becoming thrifty? In what con-
dition would the landholder, the merchant, and the artist
find themselves, if they should be represented in the national

"legislature by persons of this description only ? Might they

not count at least upon high taxes and their rigid collection ? "

Moreover, what about members of Congress involved in

transactions at the bank? Can they be regarded as the

representatives of the landholders, merchants, and artisans ?

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 201

"In this view a concise illustration may not be deemed
improper. The stocks are low, and the command of money
for a short term only would enable the holder to clear with
certainty such a sum. A question of moment is depending
and a member of Congress may obtain a discount with the
bank for that sum. He makes the purchase. The party
aiding in this operation with the bank has likewise the
direction of the sinking fund : its monies are seasonably
and publicly exhibited at the market and the stocks rise.
The gain has been made and the demands of the bank may
likewise be answered. Or perhaps he is indigent, pressed
by difficulties and seeks thus to be relieved : or his note has
already been deposited in thel)ank and to some amount and
the day for repayment approaches, has he the means ? and
if he has not, how shall he be relieved from this painful
dilemma? Shall the indulgence be extended again and
again and by the intercession of this person? Have the
members of the legislature sufficient independence, virtue,
and firmness, to witltstand these temptations ? "

Such an expectation would be illusory. The fact that
members of Congress were security holders and owners of
bank stock simply increased the power of the fiscal corps.
"In all operations upon the legislature, whether for the
particular emolument of the bank, the fiscal corps in general,
or any other purposes, in which the views of the party are
interested, the prospect of success is greatly improved. And
in all inquiries relative to the conduct of the officer, in the
management of the public monies, these members of Congress,
hank directors, and the bank itself, give him their firm and uni-
form support. In their eyes his conduct will appear immacu-
late, angelic, and partaking of something still more divine.

" 1

•Here Taylor remarks in a footnote: "See the speech of William Smith, of
South Carolina, where he says, 'That the Secretary would in the issue rise above

202 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

In Taylor's opinion, conclusive evidence that the ruling
financial interests dominated Congress was afforded by the
vote on the resolutions growing out of the investigation of
the Treasury Department in March, 1793,^ when Hamilton
was exonerated. The resolution to censure the Secretary

Vwas defeated by a vote of thirty-four to seven. "Of the
thirty-five," ^ said Taylor, "twenty-one were stockholders
or dealers in the funds, and three of these latter bank direc-
tors and whose degree of zeal was obviously in the ratio

^ above stated, as their relative profits ; the bank directors
being considerably more active and zealous than the other
members of the corps. That the fact of this number being
stock-holders, is true, can, it is believed, be satisfactorily

V shewn."

Thereupon, Taylor brought forth a list of the security
and bank stockholders in Congress, saying, "The books of
transfer at the Treasury and the books at the bank are held
secret under the obligation of an oath on all persons who use
or inspect them not to reveal the names or amount of the
stockholders.' But from information obtained through

every calumny as fair as the purest angel in heaven.' Mr. S , it is well known

holds between three and four hundred shares in the bank of the United States and
has obtained discounts, ad libitum."

1 Annals of Congress (2d Congress), pp. 899 ff.

* Taylor was mistaken. The vote was thirty-four. Ibid., p. 963.

* The secrecy which surrounded the Treasury Department prevented the Repub-
licans from getting possession of the records to prove their charge that a large
number of members of Congress were involved in paper operations or were security
holders. The Treasury Records which have come down to us are principally those of
the loan offices in the several states which were later concentrated at Washington.
The books of the central Treasury Department have nearly all disappeared and
they were the books which contained most of the holders of stock at the seat of the
government. There was a fire in the Treasury' just before Jefferson's inauguration
during the last days of the Federalist administration, and the Republicans de-
clared that it was a design not an accident. Among Hamilton's miscellaneous
papers is a printed circular which insinuates that the Federalists had some records
which they did not want to pass on to the Republicans. The following passage
occurs in this circular: "A few days before the meeting of Congress, a fire broke
out in the War Office which consumed many valuable records and works of a rare
kind not to be replaced ; about the 20th of January a fire broke out in the federal

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 203

other sources, the following members of C— g— ss are known

to be stockholders in the bank of the United States or in
the public funds :

N-w-H—jpshire ^ N-w-Y—k

Mr. G-m-n* Mr. L-r--ce *

L~gd-n * K-g *

M-ssa — s~Us

Mr. C-b-t * N-w J-r-y

St-"g Mr. B-di-t

A— s* D-yt-n*

G--y* R-hf-d
G-d-e

S-dg — k

P—ns—v-

Rh— Isl~d Mr. M-

rr-s

Mr. B — n* F-zs s*

F-st-r H-st-r

Conn—t — t D-la—re

Mr. T— b-11* Mr. R--d
S— rm-n *
E-sw-th *

W-sw~th * M-yl-d

H-llh-se* Mr. M-rr-y*

L-n-d * K-y

manufactory of arms at Springfield (Massachusetts) by which all the implements
and materials to an immense value were consumed. About the same period the
treasury office in this place was also set on fire. Three fires thus succeeding each
other at a period, when patronage and the secrets of office were about to be trans-
ferred to different hands could not but excite the worst suspicions ; after much
inquiry on the subject the only thing discovered is that nobody knows anything
about the origin of the fires!" A printed circular, dated, Washington, March 6,
1801. Hamilton Mss., March 6, 1801. Marked "A Southern Circular" [in Ham-
ilton's hand] ; signature cut out.

> "Those marked thus * are believed to be stockholders in the bank."

204 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

N~th C—l~a S-th C—l-a

Mr. J-ns-n* Mr. Iz-d*

W ms-n S-th *

St-le T-k-r

G — g-a
Mr. F-w*"

Taylor did not regard these fiscal operations by members
of Congress as an incidental part of the work of the govern-
ment under Washington's first administration. On the
contrary, he said: "If we take an impartial review of the
measures of the government from its adoption to the present
time [1793], we shall find that its practice has corresponded,
in every respect, with this theory. The demonstration
strikes us in every page of the law, that a faction of mo-
narchic speculators seized upon its legislative functions in
the commencement and have directed all its operations
since. We shall find that to the views of this faction, an apt

• instrument has been obtained in the Secretary of the Treas-
ury. ... If the public debt has been accumulated by every
possible contrivance, buoyed up by means of the sinking
fund, made in a great measure perpetual, and formed into
a powerful monied machine, dependent on the fiscal admin-

vistration, to this combination it is due. If by means of this
sudden elevation of fortune, a dangerous inequality of rank
has been created among the citizens of these states, thereby
laying the foundation for the subversion of the government
itself, by undermining its true principles, to this combi-

( nation it is due. If those sound and genuine principles of
responsibility which belong to representative government
and constitute its bulwark and preserve its harmony, have
been annulled or weakened ; if a practicable means of
influence, whereby the members of the legislature may be

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 205

debauched from the duty they owe their constituents has
been formed ; if, by impHcation and construction, the
obvious sense of the constitution has been perverted and its
powers enlarged, so as to pave the way for the conversion
of the government from a Hmited into an unhmited one, to
this combination they are due."

It would be difficult to imagine a more concise, pointed,
and unequivocal arraignment, on economic grounds, of the
ruling party during Washington's first administration.
There is nothing about "democracy" or "equality" in it.
The epithet "monarchical" is appUed to the enemy, but
that was simply a common term of reproach continually
used by the Republican opposition from the beginning.
The whole indictment may be summed up as follows :

1. The financial interests gathering around the funding \^
of the debt and the bank took possession of the government
and constituted the dominant directing party.

2. This financial group constituted a separate class thriv-
ing at the expense of other classes composed of the land-
holders, the merchants, and the artisans who paid the taxes ^
and suffered from the inflation of capital.

3. Every measure of the federal government from 1789
to 1793 was an expression of the will of this financial class
operating through the Treasury and the security and bank
stockholding members of Congress.

4. The federal government was in 1793 a class govern-
ment in which the landowners, merchants, and artisans were
not truly represented.

The remedy which Taylor advanced for this evil condition
of affairs may be stated in his own words :

1. "Let the public creditors stand apart, not as a class of
men to be branded with reproach and infamy, but as consti-
tuting an interest, which, without due restraint, may en-

206 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Vdanger the general welfare; and if admissible at all fnto
that branch [the legislature], let them be inhibited under
the severest penalties from a profanation of its functions
afterwards, by any traffic in the public funds."

2. ''Let the law establishing the bank, as a violation of the
principles of the Constitution, be declared null and void, or
at least the establishment be repudiated from its present

I impure connection with the government."

3. "Let the whole system of the treasury department
undergo a thorough reform."

4. "Let us return to the Constitution," is Taylor's last
plea. "Renovations of this sort will not violate public
credit, but establish it in the public confidence; will not
impair the energy of the Constitution, but restore it to its
pristine health and proper functions ; will not stain our
national character, but exhibit it in its legitimate features,

Vof a dignified simplicity and genuine republicanism." ^

Taylor's second great pamphlet against the fiscal party
in control of the federal administration, An Enquiry into the
Principles and Tendency of Certain Public Measures (1794),

' By no means all of the opponents of Federalism were against the funding and
revenue systems as such. Many moderate critics directed their attacks against the
particular policy for which Hamilton was sponsor and which Congress accepted.
"A citizen of Philadelphia" voiced this type of opposition in a letter published in
Fenno's Gazette on October 10, 1792, in which he said : "My greatest objection
is more to the disposal of the money when it is collected, than to the existing mode
of assessing or collecting it — the money when collected from the labors of the
people is given by the funding system, not to the men who originally earned it,
not to the men to whom the public faith was plighted over and over again, not to
the men who contributing their substance and services 3AVBD our country, saved us all
in the time of deepest distress — but by this fatal system a title is given and pay-
ments actually made of an immense treasure — the dear earnings of the foremon-
tioned Patriots, not to them, I say, but to a parcel of speculators, who never earned
a shilling of it, or paid any adequate compensation for it, or even set up any kind of
title to it grounded either on their merit, earnings, services, or any purchase for
valuable considerations paid, but they claim and receive it imder a most extrava-
gant construction of an old rule of law, strained and stretched far beyond every
reason on which the law ever was or is grounded."

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 207

was prefaced by an open letter to the President of the United
States directed to him "in the spirit of truth, and not of
adulation." His first point of attack was the Bank and he
devoted many pages to an analysis of the political economy
of the fiscal system and its relation to productive labor. He
declared that "a design for erecting aristocracy and a
monarchy is subsisting — that a money impulse, and not the
public good, is operating on Congress ; . and that taxes are
imposed upon motives other than the general welfare."

In the operations of the Bank, Taylor saw arising a con-
flict between capitalism and labor. "A portion of the rich\
class of citizens are the proprietors of the device, whilst
labour supports it. An annuity to a great amount is
suddenly conjured up by law, which is received exclusively
by the rich, that is the aristocracy. Will it not make them
richer ? It is paid out of labour, and labour in all countries
falls on the poor. Will it not make this class poorer ? . . .
Banking in its best view is only a fraud whereby labour
suffers the imposition of paying an interest upon the circu-
lating medium ; whereas if specie only were circulated, the
medium would, in passing among the rich, often lie in the
pockets of the aristocracy without gaining an interest. But
the aristocracy, as cunning as rapacious, have contrived this
device to inflict upon labour a tax, constantly working for
their emolument. . . . Labour is deprived of its hard
earned fruits. A portion of these is gotten from it and be-
stowed upon ease and affluence. The loss is the same,
whether a daring robber extorts your property with his
pistol at your breast or whether a midnight thief secretly
filches it away."

By the robbery of labor an aristocracy is being erected
in the United States. It is true, the Constitution forbids
titles of nobility, but a " money-ocracy " is far more to be

208 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

feared than any "shadow titles." "Which is most to be
dreaded ; titles without wealth, or exorbitant wealth with-
out titles ? Have the words 'prince, lord, highness, or pro-
tector, a magical influence upon our minds, or can they lay a
spell upon our exertions ? . . . Who are most to be dreaded,

Nthe nominal or real lords of America? It is evident that
exorbitant wealth constitutes the substance and danger of
aristocracy. Money in a state of civilization is power. If
we execrate the shadow, what epithet is too hard for an ad-
ministration, which is labouring to introduce the substance.
... A democratic republic is endangered by an immense
disproportion in wealth. In a state of nature, enormous
strength possessed by one or several individuals would con-
stitute a monarchy or an aristocracy — in a state of civil-
ization similar consequences will result from enormous
wealth. . . . The acquisitions of honest industry can sel-
dom become dangerous to public or private happiness
whereas the accumulations of fraud and violence constantly

Vliminish both." ^

The development of an aristocracy of wealth was not the

'^purpose of the Constitution. "Did labour intend to place

1 J. F. Mercer, of Maryland, joined with Taylor in looking upon the public
debt as a charge upon labor. In a speech made in Congress in 1792, he said : "All
public revenue or private income is a contribution, mediate or immediate, of the
labour of the industrious farmer or mechanic. If the rich pay anything, it is only
mediate — a part of what they first receive from these classes. . . . All public
burdens fall, in a great measure, on the land, so as to diminish its value and price,
as I shall observe ; but then, to the men who lend to government, lands have no
value but from the hands that are to work it. . . . Every atom of funded debt
is so much taken from the value of the land in the hand of the landholders, and so
much diminiphed from the value of labor to the laborer. ... A love and venera-
tion of equality is the vital principle of free Governments. It dies when the gen-
eral wealth is thrown into a few hands. The effect of stocks is to transfer the fruits
of the labor of the many, who are able to appreciate its value by the difTiculty of
acquirement, and would convert it into useful improvement, into the hands of the
opulent few, who exchange them for foreign luxuries and consume in an hour the
labor of industrious families for years. It prevents a general diffusion of wealth
by drawing it to a centre, and saps the foundation of a Republican Government."
Annals of Congress, 1791-1793, pp. 506 ff.

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 209

itself under the whip of an avaricious, insatiable, and lux-^
urious aristocracy? Labour, in the erection of a govern-
ment, after deducting the necessary expence of supporting
it, designed to secure safety to itself in the enjoyment of its
own fruits. The stimulating system [applied by Hamilton]
frustrates this object and changes government into its
master, brandishing the lash of legislation and leaving to
labour what measure of sustenance it pleases. . ./T A
beast of burthen is more remarkable for its patience than j
its spirit. An aristocracy, therefore, have good reason to
exclaim 'a national debt is a national blessing,' and in pur-
suance of their maxim, to create one that is fictitious, pay-
able to themselves out of the hard-earned fruits of labour.
To them it is a mine, yielding gold without work. . . . The
plebians of this age are too wise to be individually cozened
by patricians, so that the latter are obliged to create a ficti-
tious debt, by the help of law, imposing generally upon the
former, both an usurious and compound interest." ^

The aristocracy thus established at the expense of land and v
labor tended to weaken the sovereignty of the states by
drawing powerful interests to the support of the federal gov-
ernment. "A recurrence to direct taxation by Congress will
swallow up the little sovereignty, now left to the once sov-
ereign individual states ; and every accumulation of the
debts of the Union is an impulse toward that end. Hence j
all assumptions and hence the enormous loans which have
been negociated. In the power of money is the confidence »
of administration placed ; by assuming all money negocia-
cions, a face of business and activity will be bestowed on the
Federal government. The exclusive payment of debts and
imposition of taxes will exhibit it as the only political object
to interest the attention of individuals ; whilst the state
governments will become only speculative commonwealths >^

210 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

to be read for amusement, like Harrington's Oceana or
Moore's Utopia. . . . The funding system was intended
to effect what the bank was contrived to accelerate :
\ ^ "1. Accumulation of great wealth in a few hands.

"2. A political moneyed engine.

''3. A suppression of republican state assemblies, by de-
priving them of the political importance resulting from the
^ V imposition and dispensation of taxes."

Therefore, said Taylor, the federal Constitution was
I flagrantly violated by the Federalists. From the system
♦ flowed "the following infractions of the clearest constitu-
V tional principles" :

"1. Members of Congress may vote for the erection of a
gainful project and be the receivers of the gain.

"2. They may impose a tax on the community or a part of
it, and instead of sharing in the burthen share in the plunder.

"3. The higher and more unnecessary the taxes and
loans are, the more public money will be deposited in the
bank and the greater will be the profit of the bank-members
of Congress, who nevertheless vote for taxes and loans.

"4. A member of Congress, debauched by a profitable
banking interest ceases to be a citizen of the Union or an
inhabitant of the state which chooses him, as to the purposes
of the Constitution. He becomes a citizen and inhabitant
of Carpenters Hall. . . .

"6. The Constitution aims at a real representation of
the states in proportion to numbers, making no provision
for members from corporations ; and yet if the members of
this corporation keep their seats in Congress, it is moderate
to state that it will be better represented than any state. . . .

"7 . . . . It would be better to allow the bank, members
[in Congress] than to permit it to plunder the states of their
several quotas.

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 211

"8. It was evidently designed, that the senate as judges
of impeachments should be constitutionally preserved in a
state of impartiality. Impeachments originate in the y
house of representatives, and the crimes to be restrained by
this process will mostly be comprised in a misapplication of
public money. But if those who are to inquire into such
misapplications, to impeach, and to decide upon impeach-
ments, may in consequence of banking and paper systems,
be gainers by the misapplications, it is obvious that the
check provided by this article of the Constitution upon a
species of criminality, so dangerous as to have attracted the
particular attention of a general convention is entirely de-
feated. If accomplices are to set enquiries on foot — to
accuse and to decide, no prophetical spirit is necessary to
foresee the decision. . . . Bank directors, stock holders
and a paper interest may be more likely by their judgments
to disquahfy honest patriots from holding 'any office of
honour, trust, or profit under the United States' who shall
obstruct peculations from public labour in any shape,
than to remedy frauds favouring a moneyed interest in gen-
eral, and accruing to their own emolument in particular." ^ v

Taylor's attack upon the fiscal system as a capitalist
device was warmly seconded by the notorious Callender's
clever and bitter pamphlets. In his Sedgwick & Co. or a

* It is not to be supposed that attacks on the security-holding interests were
confined to the somewhat mild-mannered pamphleteers of Anti-Federalism. It
is not often that such hot political controversies are carried on entirely in language
appropriate for the drawing room. The Anti-Federalists assembled in conven-
tion in Alleghany county, Pennsylvania, in April, 1794, suggested more violent
methods for rescuing the Federal Government from the hands of "the aristocracy
of wealth " than those proposed by Taylor, of Virginia. By a resolution they
declared : "We have observed with great pain, that our councils want the integrity
or spirit of Republicans. This we attribute to the pernicious influence of the stock-
holders or their subordinates; and our minds feel this with so much indignacy,
that we are almost ready to wish for a state of revolution, and the guillotine of
France for a short space, in order to inflict punishment on the miscreants that
enervate and disgrace out Government." Annals of Congress, 1794-1795, p. 929.

212 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Key to the Six Per Cent Cabinet, published in 1798, Cal-
Mender fell upon the Federalist party, charging its leaders
with having corrupted the country and cloaked their pro-
ceedings in ostentatious patriotism and unctuous piety.
He carried the argument to its extreme length and declared
the funding process to be nothing but a scheme for enriching
those who were, as members of Congress, actually creating
the system. He also referred to the immense concentra-
) tion of the public securities which had taken place, holding
that "if divided among the original holders, the debt would
have fostered a substantial and republican yeomanry."
In the place of this wide distribution of the debt among
these holders a sharp concentration in the hands of specu-
lators had actually occurred and it was largely through the
influence of interested members of Congress, acting under
Hamilton's skilled leadership, that the debt was generously
■funded. "An act of Congress of September 2d, 1789," he
said, "prohibits all persons holding an office from being
'concerned in the purchase or disposal of any public securi-
ties of any state, 'or of the United States.' Disqualification
and a penalty of three thousand dollars are to be the conse^
quence of detection. But if the injunction was requisite
upon officers of the Treasury, it seemed yet more wanted
for Congress members. They moved in a higher sphere.
By purchasing certificates by one hand and making laws
with the other, they could accumulate, as William Smith
actually did, an enormous fortune. Their statute book
has no prohibition against themselves. ... If Dr. William
Smith and forty other members of the two houses were en-
titled to trade in paper, they had no right of hindering any
one else. Speculation was not to be hedged in for them.
. . . Much noise has been made and much indignation
excited with respect to democratic infidelity. Compare it

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 213

with the performances of six per cent piety. While our
legislative majorities continue to serve an apprenticeship
in the Hamiltonian academy of morals, it is of very small
consequence whether they are atheists, anabaptists, profess
any rehgion or none. . . . The reproach of free thinking
branched into a miUion modifications has been repeated
and with some effect for a prodigious number of times.
But on tracing the treasury faction up to the fountain head,
it is clear that the first bond of union among their leaders
was a conspiracy for paper jobbing. To enrich perhaps fifty
members of Congress, the whole continent was converted
into an immense gaming table, and the wheels of govern-
ment were clogged and the industry of the country was
oppressed with forty milHons of domestic debt, instead of
ten or fifteen millions. Of their religion, the six per cent
heroes have given many practical proofs. . . . This is a
bird's eye landscape of the truly federal system ; and of the
precepts and projects of its godly and sanctified con-
ductors." ^

Minor pamphleteers appeared to be no less certain of
their ground than Taylor and Callender. In an anonymous
tract bearing the title Five Letters Addressed to the Yeomanry
of the United States, issued at Philadelphia in 1792, ''A
Farmer" made a long argument for a bill of rights, citing the
example of the French Declaration of the Rights of Man.
"Had the Constitution of the United States a foundation
equally firm and equitable," he held, "we should not at
this day witness the laws of the Union stained with,

I Callender, Sedgwick & Co. or a Key to the Six Per Cent Cabinet. Boudinot
(see above, p. 184) was president of the American Bible Society, and Hamilton
proposed in 1802 to link religion with the Federalist Party by founding the "Chris-
tian Constitutional Society," whose objects were to be "the support of the Chris-
tian Religion," and "the support of the Constitution of the United States." Works
(Lodge ed.), Vol. VIII, p. 598.

214 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

"1st. Mercantile regulations impolitic in themselves and
highly injurious to the agricultural interests of our country.

"2. With funding systems, by which the property and
rights of poor but meritorious citizens are sacrificed to
wealthy gamesters and speculators.

"3. With the establishment of Banks authorizing a few
men to create fictitious money, by which they may acquire
rapid fortunes without industry.

"4. With excise laws which violate the tranquillity of
domestic retirement and which prevent the Farmer from
enjoying the fruits of his care and industry." The farmers,
he added, constitute nine-tenths of the population, and yet
ask for no "partial privileges" such as manufacturers de-
mand for themselves.

In another Philadelphia pamphlet of 1793 bearing a simi-
lar title. Letters Addressed to the Yeomanry of the United
States by "An American Farmer," the antagonism between
agrarian and capitalist interests was sharply brought out.
The author declared that the property of the "farmers and
soldiers" had been taken away from them for the benefit
of "undeserving speculators," and he then savagely at-
tacked Hamilton's entire system for the following reasons :
" First. It is certain that national debts cause a mighty con-
fluence of people and riches to the capital, by the great sums
levied in the provinces to pay the interest of these debts.
Secondly. Public stocks being a kind of paper money have
all the disadvantages attending that species of property.
. . . Thirdly. The taxes which are levied to pay the in-
terest of the debts are apt either to heighten the price of
labor or to be an oppression on the poorer sort. . . .
Fifthly. The greatest part of the public stock being always
in the hands of idle people who live on their revenue our funds
give great encouragement to an useless and inactive life."

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 215

To the southward, popular writers, in attacking the fiscal V
system, constantly referred to the burden which it had laid
upon the agrarian and planting interests. To them, as it
seemed to Calhoun and McDuffie long afterward, the
burden of capitahsm was borne almost entirely by the
South alone. Charles Pinckney in the City Gazette of |.
Charleston, on October 3, 1800, for example, not only criti-
cised Hamilton's policy as an avowed discrimination in
favor of the moneyed as against the planting interest, but
held up Jefferson, the planter, as the true representative of
the Republicans against John Adams, a probable "stock-
holder" and the spokesman of the moneyed group. In order v
to concihate those planters who might have been frightened
at Jefferson's theoretical views against slavery, Pinckney
assured his readers with high confidence that no practical
application of those views would be attempted by the sage
of Monticello. '^How then does it happen," he inquired,
"that in laying a direct tax the whole of it is laid on lands andS/
slaves only, and on no other species of property? Why is
the whole of it laid on the agricultural interest and the land-
holder? . . . Wise governments have invariably consid-
ered the landed and agricultural interest as the most val- ^
uable of their citizens . . . whereas our government has
placed the landholder and the planter in an oppressive and
degrading predicament. And what is this done for ? Why,
clearly to exempt all the monied interest, which is by far the
largest in the Northern states." ^

It was not merely in pamphlets and newspapers of un-
certain importance or slight circulation that the protest of
agriculture against the Federalist fiscal system was voiced.
As early as December 16, 1790, about four months after the
passage of the funding bill, the legislature of Virginia, in

' For more of Pinckney's reflections in a similar vein, see below, p. 373.

216 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

regular session adopted, as we have noted above, a solemn

protest against that measure and everything impKed in it.^

"Your memoriaUsts," runs this historic document,

v" discern a striking resemblance between this system and
that which was introduced in England at the Revolution —
a system which has perpetuated upon that nation an enor-
mous debt, and has, moreover, insinuated into the hands
of the Executive an unbounded influence which, pervading
every branch of the government, bears down all opposition
and daily threatens the destruction of everything that
appertains to EngHsh liberty. The same causes produce
the same effects. In an agricultural country like this,
therefore, to erect and concentrate and perpetuate a large
moneyed interest is a measure which your memoriahsts
apprehend must, in the course of human events, produce
one or other of two evils : the prostration of agriculture at
the feet of commerce, or a change in the present form of
Federal Government, fatal to the existence of American

^liberty." . . .

This protest of agriculture against capital is then trans-
formed into a fundamental doctrine of constitutional law.
"Your memoriahsts turn away from the impohcy and in-
justice of the said act and view it in another light, in which

V to them it appears still more odious and deformed. Dur-
ing the whole discussion of the federal Constitution, by the
convention of Virginia, your memoriahsts were taught to
vbelieve, Hhat every power not granted was retained';
under this impression and upon this positive condition,
declared in the instrument of ratification, the said Govern-
iment was adopted by the people of this commonwealth;
but your memorialists can find no clause in the Constitu-
tion, authorizing Congress to assume debts of the states!

> American State Papers: Finance, Vol. I, p. 90.

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 217

As guardians then of the rights and interests of their con-
stituents ; as sentinels placed by them over the ministers
of the Federal Government, to shield it from their incroach-
ments or at least to sound the alarm when it is threatened
with invasion ; they can never reconcile it to their con-
sciences silently to acquiesce in a measure which violates
that hallowed maxim — a maxim on the truth and sacred-
ness of which the Federal Government depended for its
adoption in this Commonwealth." Thus economics be-
comes politics, and politics in turn becomes constitutional
law. Yet a little while and Virginia and Kentucky shall
protest again ; and yet a while longer and the guns of
Sumter shall be heard throughout the land.

The Republican economic analysis thus expressed in pam-
phlets, newspapers, and resolutions was accepted by the
acute agents of France in the United States, Ternant, Genet,
and Fauchet, and employed in their despatches to their
home government as the chief explanation for the partisan
division in this country.^ In his famous paper of Octo-
ber 31, 1794, Fauchet represented the party contest as a
conflict between the landed and capitalistic interests.
After calling attention to the primitive differences of opin-
ion with respect to the political form of the state and to the
ingenious way in which the party of consolidation had
seized upon the states' rights term, "Federalism," Fauchet
remarked that these early dissensions would have disap-
peared if the system of finance that originated with the
Constitution had not given them renewed vigor under differ-
ent forms. "The manner of organizing the national credit,
the consolidation of the government, the funding of the
pubhc debt . . . imperceptibly created a financial class

• Edited by Professor Turner in the Report of the American Historical Associa-
tion for 1903, Vol. II, see pp, 51, 52, 54, 71, 107, 138, 139, 154, 167, 248, 340, 342,
343, for examples of the economic analysis.

218 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

which threatens to become the aristocratic order of the
V state. Many citizens, and among them, those who have
aided in the estabHshment of independence either by their
purses or their arms, have felt themselves injured by these
financial arrangements. Whence arises a declared opposi-

I tion between the agricultural and the moneyed interests. . . .
The proprietors of a barren coast fear that if the Mississippi
is once opened and its numerous branches devoted to navi-
gation, their fields will be deserted, and in short commerce
dreads to see in the back country a people who will become

Ntfivals as soon as they have ceased to be subjects. » The last
supposition is well founded. Mr. Izard, an influential mem-
ber of the Senate, in conversing with me one day, avowed
it without disguise. I shall not dwell as much upon the
grumbling excited by the methods pursued in the sale of
"^ lands. It is found to be unjust that those vast and fruitful
domains should be sold in whole provinces to capitalists
who enrich themselves with great profits by parcelling out

I to the cultivators lands which they never saw themselves.
. . . Why reserve to be sold or distributed to favorites of
the government, to a class of flatterers and courtiers, lands
which belong to the state and should be sold to the greatest

vpossible profit of all its members?" . . }

1 Le mode d'organization du Credit National, la consolidation, la fondation de
la dette publique ; I'introduction dans I'dconomie politique de la mdthode des Etats
qui ne prolongent leur existence ou ne different leur chute que par des exp6diens,
cr^erent imperceptiblement une classe Financi^re qui menace de devenir I'ordre
aristocratique de I'Etat. Plusieurs Citoyens, et entr' autres ceux qui avoient
aide k I'ind^pendance ou de leurs bourses ou de leurs bras se sont pr6tendus 16s6s
par les arrangemens Fiscaux. Dcld une opposition qui se diclare entre Vintiret
fonder ou agricole, et Vintiret fiscal : le F6d6ralisme et son contraire qui se f ondent
sous ces denominations nouvclles k mesure que le Fisc usurpe la preponderance
dans le Gouvernement et la Legislation : deR enfin I'Etat divis^ en partisans et en
enncmis du Tresorier et de ses theories. . . . Nous atteignons le principal grief
des occidentaux et le motif ostensible de leurs mouvements. Republicains par
principes, indfependans par caract^re et par situation ils doivent acc^dcr avec
enthousiasme aux criminations que nous avons csquiss6es. Mais V Excise surtout
lea affecte. . . . Ne peut-on supposer que Madrid et Philadelphia se donnent

ECONOMIC CONFLICT IN REPUBLICAN LITERATURE 219

In levelling their heaviest batteries against the holders of V
public funds and bank stock, the Republicans were really \
attacking the very citadel of capitalistic interests. This V
point must be strongly emphasized. The power of the public
creditors in the politics of the period is easily underestimated
by the superficial observer who compares the public debt
of to-day with the remainder of the fluid capital of the
country. Such a comparison is of course utterly meaning-
less. It is the amount of the public debt of 1795 contrasted
with the value of the landed property at the time which
must be taken into consideration. In Massachusetts, the
public securities more than equalled the amount of money
loaned at interest, and this was doubtless true of many
other states. The situation would be more analogous to
affairs to-day if we should put all of the railway and indus-
trial securities in a single mass and make their value and
their increment depend largely upon the measures enacted
into law at Washington. What a mighty army of interested
private persons would be speedily transformed into active
politicians may be readily imagined.

Anti-Federalists in Washington's administration had
carefully gauged the relative weight of the public debt and
landed property in the scale of wealth and in the scale of
politics as well. Speaking in 1792, on a proposition, ad-

la main pour prolonger I'esclavage du Fleuve [Mississippi] ; que les proprietaires
d'une c&te inf econde craignent que le Mississippi une f ois ouverte, et ses nombreuses
ramifications rendue k I'activite, leurs campagnes ne deviennent desertes, et enfin
que le Commerce redoute d'avoir sur ces derri^res des rivaux d^s que leurs habitans
cesseront d'etre sujets? Cette derni^re supposition n'est que trop fond6e; Un
membre influent dans le Senat, M. Izard I'a enoncee un jour en conversant avec
moi sans deguisement. Je ne m'entendrai pas autant sur les murmures qu'excite
le systfeme qui preside h la Vente des Terres. On trouve in juste que ces pals
Vastes et Feconds se vendent par provinces h dea Capitalistes qui s'enrichissent
ainsi et d6taillent avec d'immenses benefices au Cultivateur, des possessions qu'ils
n'ont jamais vues. . . . Pourquoi se reserver de vendre ou distribuer k des favoris,
k une classe de flatteurs et de Courtisans ce qui appartient k I'Etat et devrait
§tre vendu au plus grand profit possible de tous ses membres." Report of the Amer-
ican Historical Association for 1903, Vol. II, pp. 444 ff.

'220 ECONOMIC ORIGINS OF JEFFERSONlAN DEMOCRACY

vanced by Fitzsimons, for extending the period for sub-
scriptions to the public debt, J. F. Mercer, of Maryland,
said: "It [the debt] will in the aggregate form a mass of
seventy millions of dollars. The property of the United
States is worth what it will sell for at an ordinary market.
Although it cannot be precisely ascertained what the amount
would be, we are still furnished with sufficient data to form
a tolerable estimate. In the state I have the honor to
represent . . . property was assessed, soon after the war
was raised, to an ideal height, to twelve millions their
money. From the fall of price, I do not believe that the
whole or any proportion of it would now bring at a fair
market, the money. From this we must deduct four mil-
lions for the negro property, which cannot b^ included in a
relative comparison with other countries, where the laborers,
although equally and more valuable, are not considered as
property ; there would then remain eight millions. Mary-
land is at least one-twelfth of the United States ; she has,
indeed, always been rated at a higher proportion ; this would
fix the property of the United States at two hundred and
sixty millions of dollars. The debt, then, is more than one-
fourth of the whole value of the property." ^ It would
seem that this estimate of the value of the other property
in the United States is low, for the survey for direct taxes
in 1798 put the value of the land alone at $479,293,263.13.2
Nevertheless, it is apparent from the evidence massed in
this chapter, the Anti-Federalists correctly understood the
enormous weight of the debt in politics and did their best
to exaggerate it in the eyes of their followers. It is equally
apparent that they appealed to the agrarian interests to
wage war on the "moneyed aristocracy."

> AnnaU of Congress, 1791-1793, p. 608.

* Beard, Economic Interpretation of the Constitution, p. 36.

CHAPTER VIII

THE FEDERALIST ANALYSIS OF THE PARTY CONFLICT

The vehement assaults of the Republicans upon the
capitalistic policies of Washington's administration forced
the Federalists to exhaust the entire armory of their argu-
ment.^ Being on the defensive, however, they did not al-
ways maintain in their polemical literature that sharpness
of class distinction which marked the writings of the Repub-
licans. The wisest of them were, of course, too shrewd to [^
add bitterness t^ the conflict by unnecessary attacks upon the
agrarians as such, and they often employed the good tactics
of blurring the economic antagonism by denying its exist- i
ence or referring to the essential identity of interest between
capitalism and agriculture. Yet they could not altogether

^ The chief sources for the Federalist view of politics are the writings of eminent
Federalists, like Hamilton, Wolcott, Ames, Cabot, King, and H. G. Otis. The most
valuable popular discussions are to be found in the great Federalist newspaper,
the Gazette of the United States. See, for example, "A Friend to the Union,"
in the Gazette of April 21, 1790, where Congress is threatened for delaying assump-
tion, and attention is called to the dangers from the Indians, Spanish, and British
in case of the continued divisions at home. The Gazette for June 23, 1790, con-
tains an article showing that the funding of all debts is a guarantee of the perma-
nence of the Constitution. See also "Defense of the Government and the Fund-
ing System," by "A Farmer," The Gazette, February 18, 1792. An attack on
Freneau's glorification of husbandry in prose and poetry and a defence of me-
chanics and manufacturers is printed in the Gazette of August 4, 1792. Among
the pamphlets are : An Address from William Smith of South Carolina to His Con-
stituents (1794), in the New York Public Library. J. Fenno, Desultory Reflections
on the New Political Aspects of Public Affairs in the United States . . . since . . .
1799 (1800), in the New York Public Library. For the conflict in South Carolina
between the landed and capitalistic interests, see T. Ford, The Constitutionalist,
published in 1794, New York Public Library. Henry W. Dessausure, Answer
to a Dialogue between a Federalist and a Republican (1800), Wolcott Pamphlets,
Library of Congress.

221

222 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

"^escape the necessity of recognizing the economic nature of
the party division when it became necessary to rally specific
groups to the support of Hamilton's measures. Conse-

I quently we find in Federalist literature frank appeals to
certain economic groups for political support, denials of the
existence of class divisions, assertions that the interests
of all classes were identical, and condemnation of the

Vagrarians for their assaults on capitalistic enterprises.

When the battle over assumption was on, the' newspapers
fairly teemed with letters and addresses directed to the
financial elements. This was particularly true when there
was grave danger that assumption would be defeated.
One polemical writer went so far as to threaten Congress
with a special convention of public creditors at New York
or Philadelphia to "facihtate" the progress of the measure
through that body and added a warning that the number of
"respectable men" who were holders of the public debt
was too large to be treated with indifference. This advo-
cate evidently thought also that the capitalistic element
was the very substance of the new government, for he de-
clared emphatically that it would be nothing but a shadow
without "a prosperous funding system" — meaning one
which would consolidate the state and continental debt and
place the holders thereof on a secure basis.^

*"I am persuaded Congress are not so ignorant of the circunastances of the
United States as to imagine a partial system of finance is practicable. Unless the
state debts are assumed, no funding system will operate prosperously, and without
a prosperous funding system our national government will be but a shadow. In short
I dare not predict the consequences of having the public debts long neglected, or
partially provided for. The creditors of the United States and of the several
states have not yet lost their patience, or their confidence. I hope they will never
lose either, but I imagine, if nothing is done for their relief within a few weeks, they
will unite in some measures to express their sentiments to Congress in very unequiv-
ocal, but respectful language. Perhaps a Convention of Delegates from the
public creditors to moot at New York or Philadelphia could make some represen-
tations to Congress that would facilitate their determinations. The opposers of
the funding system, and in this light, I view all anti-assumptionists, are not sen-

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 223

While this writer was endeavoring to frighten Congress
by suggesting the possibiUty of a concerted effort on the part
of the financial interests, another Federalist was rallying
the security holders to the support of the administration by
showing them that the Constitution, so full of promise,
might be undone by a failure to consolidate the debt and
properly fund it. It was possible for them to serve both
God and mammon — strengthen the party in possession of
the government and protect their own pecuniary interests.
"Is there a prudent man among you," insinuated this
shrewd political psychologist, "who, comparing the funding
system without assumption, with the conduct of other
nations, and judging of the interests and passions of the state
creditors and legislatures, will say gravely and upon reflec-
tion, the revenue will be more safe and productive without
assumption than with it? . . . Judge then whether the
interest of your own paper does not require the assumption.
You cannot be safe without it. Patronize justice and prac-
tice a magnanimity which will cost you nothing, but do you
honor, by insisting that the provision shall comprehend the
kindred claims of state creditors. . . . Remember that
as the adoption of the constitution raised your hopes, the
undoing it in practice may blast them." ^

That which cropped out in polemical literature, namely,
that the security holders were supporting the administra-
tion party as they had the Constitution, appeared in private
correspondence as well as in the newspapers. Indeed, a
competent observer of contemporary politics, Chauncey
Goodrich, of Connecticut, went so far as to declare that the
successful continuance of the government depended upon
the cordial support of the creditors without whose active

sible how large a number of respectable men are holders of the public debt." United
States Gazette, April 17, 1790. Italics mine.

1 The Gazette of the United States, May 15, 1790.

224 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

influence the very Constitution itself probably would not
have been established. Writing on February 3, 1790, to
Oliver Wolcott, Jr., Auditor of the Treasury under Hamil-
ton, Goodrich said : "I have received your letter enclosing
the secretary's Report [on public credit], which I have for-
warded to your father. . . . The report has been reprinted
in this town [Hartford] and is sought for with much avidity.^
V . . . So far as I can collect the sentiments of your acquaint-
ance, they are favourable to the system. We hope the
government will improve the present season of its popularity
to establish a more permanent foundation than what it
now rests on. Its only stable support will be a well-regulated
treasury, and I am sure that the best friends of the govern-
ment will not only be disappointed but dissatisfied, if the

I present session of Congress passes without a good arrange-
ment of the finances. The public creditors will esteem them-
selves honorably used, in case the Secretary's ideas be
carried into effect ; and even if they are not so advanta-
geous, I do not imagine it will occasion any discontent to
be regarded. Perhaps, without the active influence of the
creditors, the government could not have been formed, and any
well grounded dissatisfaction on their part will certainly make

^its movements dull and languid, if not worse. . . ."^

A similar view of the situation was entertained by Oliver
Wolcott, Sr., president of the Connecticut convention that
ratified the federal Constitution and father of Oliver Wol-
cott. In a letter dated at Litchfield on January 28, 1790,
the senior Wolcott said : " This much I will venture upon
that the efficiency of this government will essentially de-
pend upon the system of their finances and the regulation
of their militia, both of which therefore, I suppose, they

• Hartford had more assumed debt holders than any of the other Connecticut
towns. Economic Interpretation of the Constitution, p. 265.
' Gibbs, op. cil., Vol. I, p. 37. Italics mine.

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 225

will extend as far as the principles of the Constitution will
admit, and consequently endeavour to include ultimately
the state debts in the system, and render the militia as
dependent as the case will admit, upon the general Execu-
tive." ^ On a later date, April 23, 1790, Wolcott wrote to
a correspondent, evidently his son in the Treasury Depart-
ment: "Your observations respecting the public debts as
essential to the existence of the national government are
undoubtedly just, — there certainly cannot at present exist
any other cement. The assumption of state debts is as nec-
essary, and indeed more so, for the existence of the national
government than those of any other description ; if the
state governments are to provide for their payment, these
creditors will forever oppose all national provisions as in-
consistent with their interest ; which circumstances, together
with the habits and pride of the local jurisdictions, will
render the states very refractory. A rejection to provide
for the state debts, which it seems has been done by a com- .
mittee of Congress, if persisted in, I consider as an over-
throw of the national government J' ^

Powerful as the security holders w-ere, it was not to them V
alone that the Federalist leaders made their appeal. All
through their writings there ran the firm opinion that
"respectable men" of "wealth" and "talents" were inevi-
tably on the side of Hamilton in the partisan conflict. For
example, John Steele wrote to the Secretary of the Treasury,
on March 17, 1793, that "to support a constitution which \
cost the best people of the Union so much pains to establish,
to counteract the nefarious designs of its enemies, and to
rally around the Federal Government as a standard where
our most precious interests are well secured is the duty of

» Ibid, p. 36.

* Ibid., p. 45. Italics mine. See Fisher Ames' view to the same effect, above,
p. 134.

226 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

^men who possess talents, property, reputation or influence." ^
A year later Francis Corbin, of Buckingham, Middlesex,
Virginia, wrote to Hamilton that "War is waged by this
faction [Anti-Federalists] against every Candidate who
possesses the union of requisites. Independent fortune,
independent principles, talents and integrity are denounced
as badges of aristocracy; but if you add to these good
manners and a decent appearance, his political death is
decreed without the benefit of a hearing. In short, with
a few exceptions, everything that appertains to the char-
acter of a gentleman is ostracised. That yourself and
Mr. Jay should be no favorites in Virginia then is not to be

'Hvondered at." ^

V While representing the Constitution as the chief hope of
the financial interests and the successful execution of Hamil-
ton's policies as the culmination of their labors, Federalist

I writers naturally completed the picture of class antagonism
by portraying Jefferson as the enemy of "sound finance"
and his followers as propertyless levellers, the spiritual

•vlieirs of Jack Cade and Daniel Shays. A keen FederaUst,
under the pen name of "Catullus" declared, in the Gazette
of the United States, that it was all very well for Jefferson
to have opposed the funding bills while they were pending
before the country, but that the continuance of his opposition
after the measures had become the deliberate and solemn
acts of the legislature was highly reprehensible. In his
opinion, this revealed a clear purpose to render the fiscal
measures odious to the people and to undermine public
confidence in the constituted authorities. Jefferson's poli-

» Hamilton Mss. (Library of Congress), March 17, 1793. See Manlius, Letters
to the Columbian Centinel (1794) in which it is represented that the "anarchists"
had tried to stir up opposition to the government in New England but were'outwitted
by "the merchants, the tradesmen, and the friends to order and our excellent
Constitution." * /'nU, July 20, 1794.

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 227

tics, he concluded, "tend to national disunion, insignifi-
cance, disorder, and discredit. . . . Disunion would not
long lag behind. Sober minded and virtuous men in every
state would lose all confidence in and all respect for a govern-
ment which had betrayed so much levity and inconstancy,
so profligate a disregard to the rights of property, and to the
obligations of good faith, . . . The invasion of sixty mil-
lions of property could not be perpetrated without violent con-
cussions. The States whose citizens, both as original
creditors and purchasers own the largest portions of the
debt (and several such there are) would not long remain
bound in the trammels of a party which has so grossly vio-
lated their rights." ^

If Jefferson was an enemy of wealth and respectability,
his agrarian followers were more than worthy of their leader.
Federalist champions never wearied of representing them
as the foes of property and order. One declared that the
Republicans were a horde of levellers bent on dividing the
savings of the thrifty. Another vented his anger upon the
opposition by formulating their philosophy in a "Sample
Oration" purported to have been delivered by a leveller at
a "Volunteer State Convention," such as had been popular
in the days of the Revolution. In this ironical partisan
document, the Republican apostle put himself forward as
the champion of the landed as against the "moneyed" inter-
est and declared his principles in the following extravagant
strain: "As to property, I have none; thank heaven, I
have divested myself of all yellow dirt, all filthy lucre, in
those blest days when I was a committee-man and watched
night and day, in public houses for the public good. Prop-
erty ... is the mother of aristocracy. ... A Numarian
law would be a rich blessing. Oh, how it would gladden

1 The Gazette of the United States, September 29, 1792.

228 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

the hearts and gild with pleasure the faces of the true
disciples, to serve once more on committees, whose business
it should be, at least once in three years, to inspect the
chests and coffers of the overgrown purse-proud man or the
paltry muck worm, who toiled with the dirty view of 'laying
up pelf against a rainy day,' and divide their ungodly spoil
amongst the pure lovers of liberty.

''A Numarian law is not an object to be dispaired of.
In order to gain the land holders it is only necessary to con-
vince them that it is their interest to pare commerce to the
quick. . . . That the landed interest is one thing, and the
monied is another, is very plain. ... I have heard it re-
ported that there is one state in the Union of no mean size,
that would not suffer land to be touched by that harpy the
law. If this is true, it is a glorious example, a noble poUcy.
A new made landed-man laughs his monied dupe creditor
in the face, with virtuous scorn. . . . View the American
Court and tremble. The head of the system and all coad-
jutors ought speedily to be ostracised and banished. . . .
For a beginning I would remove the Secretary of the Treas-
ury and appoint some young Broker in his place. . . .
For Secretary of War I would chuse their worthy re-inflated
fellow citizen, Daniel Shays, Esq." ^

This capitahstic-agrarian antagonism which was brought
out by those Federahsts who frankly loved the lust of battle
and sought neither compromise nor conciliation was quite as
definitely set forth by those milder, and perhaps shrewder,
writers who contented themselves with filing a demur to the
allegations of the Republicans, that is, admitted a divergence
of economic activity but denied the necessity of an inher-
ent conflict. As early as September 23, 1789, some months
before Hamilton announced this economic theory in his

> Gazette of the United States, October 22, 1791,

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 229

Report on Manufactures, a writer in the Gazette of the
United States adopted the tactics of ''harmonizing the
interests" rather than sharpening them, by saying : ''It
is asserted that there is, at this day, so great a diversity
between the different states in point of rehgion, manners,
habits, and interests as to render the administration of a
general government inconvenient and perhaps impracti-
cable. . . . Many appeal to the supposed fact that the >
eastern and southern states have opposite interests. Un-
doubtedly a diversity of interests is one of the most fruitful
sources of contention and hatred. Too much stress, how-
ever, is generally laid upon it. For such interests, tho
different are not always repugnant. ... It is very cer-
tain that the employments of the southern and eastern
states are different : But it is denied'^at their interests
are incompatible. . . . The eastern and southern states
are necessary to one another. And nature has interposed
to forbid their becoming commercial rivals. Wh^t one
raises, the other wants, and when one prospers tlie other
will partake. . . . Without violent evidence, a patriot
should not admit that the interests of the southern and
eastern parts of the Union are opposite. It will require
some reflection to suppress his wonder, that not only with-
out evidence, but against the most palpable, it has ever
been the creed of the country. It is time to think more
justly and more rationally, which is the same thing." ^

1 Ibid., September 23, 1789. A friend of the Federalist administration is
represented as saying to an "honest husbandman" in Massachusetts: "Be
not discouraged ; let not the most frightful suggestions of the discontented
scare you from your industry, [for the debt will be repaid in due time]. Taxes
in this country, never have been and, we confidently believe, they never will
be the means of imprisoning the industrious man. The case of the farmer has
in some respects been hard, too small a comparative value has been set on the
produce of his farm, when made the consideration of money. Too free a use of
foreign commodities was the reason, the purchase of which made large and
constant draughts on our specie. But against this evil we are daily strengthen-

230 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Other Federalists were even more enthusiastic about
harmony. They were not satisfied with merely showing the
natural reciprocity which existed between the agricultural
and trading regions, but they also undertook to prove that
the augmentation of fluid capital which was contemplated
by Hamilton's fiscal system would benefit all members of
the community whether they held securities or not. This
was, of course, th^ burden of the Report on Public Credit,
and popular writers thought it an argument sufficiently self-
evident to lay before the readers of newspapers. The
Gazette of the United States declared, within four months

Vof the passage of the funding act, that ''Every citizen of
the United States is interested in the rise of pubhc paper
— whether a proprietor or not ; for in proportion as its value
approaches to that of specie, an additional medium is in-
troduced, by which every person who has anything to do
with trade, commerce, agriculture, or manufactures is bene-
fited. It is undoubtedly a fact that this country has never

I been in possession of a sufficient quantity of the precious
metal to constitute a competent circulating medium without
the auxihary of paper money. ... An addition to the
present medium of the United States, bank paper, bottomed
on substantial funds, such as through the favor of heaven
are now within our reach, will most undoubtedly invigorate
every spring of industry and enterprise that can be set in

*^motion." ^

ing ourselves. Progress in preparation for supplying our demands from among
ourselves is successfully made: the interests of the mechanic, husbandman, and
artisan are anxiously blended with the first objects of our legislators. Under
their watchful protection all the means within reach for promoting them will be
hunted up. Thus will industry be encouraged and our money made more plenty."
Gazette of the United States, April 10, 1790. (From the Massachusetts Spy.)

» Gazette of the United States, December 29, 1790. One Federalist pamphlet-
eer in his enthusiasm for the administration policies even suggested that the wizard
Hamilton had devised a plan whereby the debt would pay itself. "The safety,
dignity, and prosperity of the United States," wrote Daniel Leonard in 1792,

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 231

For those who took this view the prosperity of the country V
was ample proof of the general beneficence of the fiscal sys-
tem. Before the new government was established unem-
ployment was widespread, industry languished, and the \
farmers were discouraged. But shortly after the Federalist
policy went into operation, the land began to flow with milk
and honey: "To what physical, moral, or political energy V
shall this flourishing state of things be ascribed ? There is
but one answer to these inquiries : Public credit is restored
and ESTABLISHED. The general government, by uniting and
calling into action the pecuniary resources of the states,
has created a new capital stock of several millions of dollars,
which, with that before existing, is directed into every branch
of business, giving life and vigor to industry in its infinitely )
diversified operations. The enemies of the general govern-
ment, the funding act and the National Bank may bellow
tyranny, aristocracy, and speculators through the Union and
repeat the clamorous din as long as they please ; but the
actual state of agriculture and commerce, the peace, the
contentment and satisfaction of the great mass of people,
give the lie to their assertions and stamp on them in capi-
tals : Vox et praeterea nihil.'' ^

"have grown out of the systems he has proposed. It is this important character
who has taught us and brought it home to the sense of the people at large that
public credit is an inestimable jewel. It is he who has taught us to derive an ad-
vantage from the public debt by creating the means, out of the debt itself, to dis-
charge it. . . . The establishment of the national bank to facilitate the operations
of the government and to provide against all hazards from a want of punctuality
in the regular discharge of the interest of the debt at stated periods, is equally an
act of judgment as of policy." Daniel Leonard, Strictures and Observations upon
the Three Executive Departments (1792), New York Public Library.

' The Gazette of the United States, September 5, 1792. While instructing
grand jurors in the principles of the new constitutional system, federal judges did
not overlook directing attention to the economic advantages to be derived from it.
For example. Judge Grimke, in a charge to the grand jury of the Camden district
in 1791, called their attention to the fact that assumption had relieved South
Carolina of a burden of about $4,000,000, enhanced the value of securities in the
hands of holders, and would "augment the price of property to a very considerable

232 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

This plea that agrarian and capitalistic interests were
reciprocal and that the general prosperity diffused through-
out the country by the fiscal system was an evidence of the
fact did not, however, meet all of the Republicans' objec-
tions. It left unanswered the contention of the latter that
a long continuance of the economic policy of the government
would end in the prostration of the agricultural class at the

^eet of the financial and commercial classes. In attacking
this assertion. Federalist apologists admitted the class divi-
sion but flatly denied that capitalism would conquer agri-
culture. The very idea was, in their opinion, preposterous.
The great majority of the people were farmers and Hved
outside of the cities. The amount of capitalist property
was relatively small when compared with the value of the
lands. "On an impartial view of the United States, no man
will deny," wrote "The Republican" in Fenno's Gazette,
"that the landed interest maintains its ancient preponder-

' ance ; nor will he pretend that the value to which the public
stocks have risen will diminish it. The debt is not increas-
ing, but is diminishing daily, and the time of its extinguish-
ment need not be far removed. The amount of the bank
stock is also fixed and it is to the landed property as a drop
in the ocean. The landed interest, on the contrary, has
thousands of hands yearly imported to increase its im-
portance. Some hundred thousand acres are added every
year to the cultivation of our country. Look at the late
enumeration, and see how few live in cities compared with
those in the country ; and while the cities increase ten, the
country gains a thousand. On this general view of the
subject, a man may be convinced that there is no over-

vruling monied influence raised up to govern the landed,

dcRreo." This happy outcome, the judge thought, would reconcile to the federal
union the minds of those honest citizens who were at first opposed, to the Consti-
tution. The Gazette of the United States, February 19, 1791.

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 233

as those writers have insinuated, whose purpose it is to set
one part of the people against another. ... If the title
to a horse or a barrel of corn be in dispute, it is a noble privi-
lege that the whole power of our government cannot destroy
a man's right. But when fifty or sixty millions of property
are depending before Congress, these republicans, as they
dare to call themselves would make a sport of the acknowl-
edged right of the possessors." ^

It surely does not require additional testimony to show
that the agrarian-capitalistic antagonism, whether real or
imaginary, was, in the minds of many Federalist champions,
at the very centre of the partisan conflict. But it may be
objected that the sources cited thus far in this chapter are
fugitive pieces of polemical literature and do not represent
any serious or systematic thinking on the part of the authors.
Without admitting the validity of this contention, it seems
worth while to inquire whether in the more orderly and
pretentious writings of the time or in the statements of men
of larger authority than those just quoted the same eco-
nomic considerations appear to have been at the heart of
the political controversy.

One of the most effective and widely known of the smaller
Federalist works was a pamphlet by "Marcellus" bearing
the title Letters from the Virginia Gazette, published in 1794.
In its way, it deserves to rank with the essays of John Tay-
lor, of Caroline. The author of this ingenious tract opens
cleverly by insinuating that the farmers have been deceived
by the demagogue, not because their intentions are evil but
because they have been improperly informed on the subject
of the fiscal system and the policy of the Federal adminis-
tration. Thus at the outset, " Marcellus " admits that the
enemy is the farmer, and he shrewdly introduces his attack

» The Gazette of the United States, October 10, 1792,

234 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

by saying that, "Men devoted to the laborious and honor-
able occupations of agriculture, at a distance from the seat
of information, without the means of inquiring or the leisure
to make deep researches and to investigate complex prin-
ciples and obscure facts — however virtuous (and in all
nations they are to be regarded as the most virtuous part of
the society) — are liable from these circumstances to be
imposed on and misled by the artifices of the wicked and
ambitious." ^

After having thus sought to engage the interest of the
farmer, " Marcellus " endeavors to destroy the idea of an
"aristocracy" in America which had been employed so
assiduously by the Republicans to stir up the populace.
"What is aristocracy?" he asks. . . . "If aristocracy in this
meaning [hereditary] does not exist [in America] let those
who so frequently use the terms aristocrat and democrat,
define them. . . . Do they mean by the term aristocrat
Va rich man, contradistinguished from a poor man? If by
the term aristocrat, they mean the rich and by the term
democrat, the poor ; by villifying the first and exalting
the last do they mean to censure industry by which wealth
is acquired and commend idleness which is the cause of

I poverty and the fruitful source of every vice. If they make
it a crime to be rich, men will cease to make any efforts to
better their condition, to provide for the education and
comforts of their families, and add to their own wealth as
well as the riches of their country by honest industry, and
from a civilized society we shall become a horde of savages.
To this deplorable condition would their system gradually

"^reduce us. But it cannot be expected that such haughty
dictators would wait for the slow operation of time. They
may attempt to reduce all property at once to a level ; abo-

' Copy in the New York Public Library.

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 235

lition of debt, agrarian laws and emancipation of slaves may
be expected among their first coups de main. For, if by the
term democrat they mean the poor, who so poor as our slaves,
who therefore so fit to participate in the spoils of the rich and
to direct the affairs of the nation?"

With the assertion of the Republicans that an aristocracy
is being built up through the operations of the fiscal system
"Marcellus" has no patience. "I ask again," he says,
"whence proceeds the danger of the growth of aristocratic
orders amongst us? Certainly not from the accumula-
tions of landed property. I may be answered from the
funding system. I may be told in the same cant, indefinite,
and uninteUigible language of the existence of a paper
nobility. ... It will be sufiicient to say that we owed the
debt — that if we were honest we were bound to pay it."

The charge that much money had been made by the ap-
preciation of securities, "Marcellus" meets with the counter
charge that land owners had been making money through
the increase of land values and that one form of accumula-
tion of riches was no more reprehensible than the other.
"That much speculation existed at the commencement of
the system is true; and perhaps much property acquired
by fraud, but are not all other negotiations also subject to
fraud? Has not land risen almost as rapidly in value as
stock in the funds? If a man makes a fortunate purchase
of land is he censured for it? If he buys the bond of an
individual for half its nominal value is he censured for it?
Why then load with opprobrious epithets those . . . who
have purchased the obligations of the public?"

If those who espouse the cause of "democracy" do not
mean thereby the cause of the poor, but direct government ^
by the voters, "Marcellus" is equally ready to combat

1 For Jefferson's view of simple, direct government, see below, p. 459.

236 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

their views. "If instead of meaning the poor by the term
democrat, they denominate a friend to that kind of govern-
ment in which each person in his individual capacity exer-
cises those functions which in our society are delegated to
representatives, such as were some of the petty tumultous
commonwealths of old, this would be a government so
hostile to the happiness of our citizens and so counter to
the habits and practice of the American people that no man
would deem it honorable to assume the name, as in this
sense it would be regarded as another term for anarchist."

Before dismissing the subject of democracy, "Marcellus"
remarks in a cutting tone that the apostles of that new order
would find it difficult to reconcile their system of "liberty"
with slavery and the disfranchisement of the white non-
freeholders in Virginia. "I could wish," he says, "that the
doctrines of the times and justice to the subject would
permit me to draw a veil over certain peculiarities. But
when we hear so much about Liberty and Equality we are
obUged to consider how far the application of these prin-
ciples in their most extensive meaning to our situation would
be promotive of our happiness and consistent with our
peace. ... It can hardly be necessary to tell a Virginian
that two-fifths of the inhabitants of our state are slaves:
and that even part of the freemen have no share in the
management of public affairs. What do those who preach
liberty and equality mean? Do they mean to raise the
blacks to equal social rights with the whites? Do they
mean to remove the existing discriminations amongst the
whites themselves? . . . Perhaps nothing is meant but
frothy declamation." " Marcellus " then adds a final stab by
suggesting that the apostles of democracy might find in New
England, which was charged with being the home of the new
aristocracy, those very conditions that seemed most com-

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 237

patible with democratic ideals : no slavery and small land
holdings. Such a "nursery of purest republican principles"
could hardly be a source of danger to the country.^

Again it may be objected that " Marcellus" is a pamphlet-
eer and that his tract directed to the instant needs of politics
does not represent a reasoned view of the merits of the party
controversy. If this is true, there is still a higher authority
whose knowledge of the period and whose powers of judgment
and exposition will hardly be denied by the most critical,
John Marshall, who, in his Life of Washington, expounded
in a few passages of that remarkable clarity and precision
which characterized his opinions from the bench, the eco-
nomic nature of the grievances on which the Republicans
thrived. The specific charges brought by them against
Washington's administration, which formed the source of
antagonism between the two parties, Marshall summarized
as follows : " It was alleged [by Republicans] that the public
debt was too great to be paid before other causes of adding
to it would occur. This accumulation of debt had been
artificially produced by the assumption of what was due
from the states. . . . The banishment of coin would be
completed by ten millions of paper money in the form of

* The scorn which "Marcellus" had for Virginia democrats who "prated " about
equality and liberty while holding two-fifths of the population in chattel slavery
and disfranchising all the non-freeholders was frequently expressed at a safer range
in New England. "Manlius," a Massachusetts pamphleteer, attacked the south-
erners for inconsistency — talking about equality while enjoying a representation
in Congress for three- fifths of the slaves held in bondage whereas "the people of
New England are equally represented whether rich or poor and their representatives
are the representatives of men equally free and possessing equal rights" (a state-
ment which was wanting in historical accuracy in view of the property qualifica-
tions on voting then imposed in New England). "Where," he exclaimed, "are
the rights of equal liberty more truly represented? From a land where a great
proportion of the inhabitants are slaves and till the ground of their lordly masters,
where education at public expense is unknown, where the poverty of the poor is
their curse, for they are necessarily bred up in ignorance and absolute idleness or
condemned to the severest drudgery?" Manlius, The Columbian Centinel (1794).
New York Public Library. The copy in the Library of Congress is ascribed to
Christopher Gore.

238 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

bank bills, which were then issuing into circulation. Nor
would this be the only mischief resulting from the institu-
tion of the bank. The ten or twelve per cent annual profit
paid to the lenders of this paper medium would take out
of the pockets of the people, who would have had, without
interest, the coin it was banishing. That all the capital
employed in paper speculation is barren and useless, producing
like that on a gaming table, no accession to itself, and is with-
drawn from commerce and agriculture, where it would have
produced addition to the common mass. The wealth there-
fore heaped upon individuals by the funding and banking
systems, would be productive of general poverty and dis-
tress. That in addition to the encouragement these measures
gave to vice and idleness, they had furnished effectual means
of corrupting such a portion of the legislature as turned the
balance between the honest voters. This corrupt squad,
deciding the voice of the legislature, had manifested their
disposition to get rid of the limitations imposed by the
Constitution ; limitations on the faith of which the states
acceded to that instrument. They were proceeding rapidly
in their plan of absorbing all power, invading the rights of
the states, and converting the federal into a consolidated
government.

"That the ultimate object of all this was to prepare the
way for a change from the present Republican form of
government to that of a monarchy, of which the English
constitution was to be the model. So many of the friends
of monarchy were in the legislature, that, aided by the
corrupt squad of paper dealers who were at their devotion,
they made a majority in both houses.^ The Republican

' The charge of the Republicans that "a paper nobility " in Congress was actually
interested in the public securities through their personal holdings, the Federalists
indignantly denied. They demanded certain proof. Blandly overlooking the
fact that the Treasury Records were under the seal of the profoundest secrecy,

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 239

party, even when united with the anti-federalists, continued
a minority. ...

"These strictures on the conduct of administration were
principally directed against measures which had originated
with the secretary of the treasury, and had afterwards re-
ceived the sanction of the legislature. In the southern
division of the continent, that officer was unknown, except
to a few military friends, and to those who had engaged in
the legislative or executive departments of the former or
present government. His systems of revenues having been
generally opposed by the southern members, and the original
opposition to the Constitution having been particularly great
in Virginia and North Carolina, the aspersions on his views,
and the views of the eastern members by whom his plans
had been generally supported, were seldom controverted." ^

they called upon the Republicans to prove their assertions. The latter, they con-
tended, had stirred up the hatred of the populace by slanderous allegations and
then had shrunk from the test of naming the members of "the corrupt squadron."
The whole attack upon the paper nobility in Congress, the Federalists declared to
be a sinister move to discredit a system whose merits were sufficient to commend
it to men who had the honor to desire that the government discharge its just
debts. Fisher Ames of Massachusetts was especially vehement in repudiating
the charge that members of Congress were themselves interested in securities
to any considerable extent or were influenced in their policies by private consider-
ations. In a long and impassioned address attacking the activities of the "Jaco-
binical clubs," he referred to the allegations of the Anti-Federalists as follows:
"The other slander which has contributed to kindle a civU war, is the paper nobility
in Congress ; that the taxes are voted for the sake, and carried solely by the strength
of those who put the proceeds in their pockets. Is there a word of truth in this?
On the contrary, there are probably not ten members who have any interest in the
funds, and that interest very inconsiderable. Citizens have thus been led by
calumny and lies to despise their Government and its Ministers, to dread and hate
it, and all concerned in it, so that the [whiskey] insurrection is chiefly owing to the
men and the societies, who have invented, or confirmed, and diffused these slan-
ders." It would thus seem that Ames' acquaintance with security holders in
Congress extended little beyond the Massachusetts delegation, or he would not
have been as loose in his generalization as to the number interested in public funds.
Annals of Congress, 1793-1795, p. 929. Ames declared that the interest on the public
funds held by members of Congress would no more than pay for the oats for their
horses. Gerry alone had $3500 a year from that source so that the Federalist
stables must have been very large.

1 Life of Washington (2d ed.). Vol. II, pp. 227 ff.

240 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRAUx

Although the RepubUcan grievances were, in Marshall's
g opinion, chiefly directed against the capitalistic features of
the Federalist system, he did not emphasize economic divi-
sions alone. He called attention to the political aspects
of the early conflict over the rights and powers of the states
and the federal government, and then continued : " To this
great and radical division of opinion, which would neces-
sarily affect every question of the authority of the national
legislature, other motives were added, which were believed
to possess considerable influence on all measures connected
with the finances."

These other motives were economic in character. "As
an inevitable effect of the state of society," continued Mar-
shall, "the public debt had greatly accumulated in the
middle and northern states, whose inhabitants had derived
from its rapid appreciation, a proportional augmentation
of their wealth. This circumstance could not fail to con-
tribute to the complacency with which the plans of the
secretary [of the treasury] were viewed by those who had
felt their benefit, nor to the irritation with which they were
contemplated by others who had parted with their claims
on the nation. It is not impossible, that personal con-
siderations also mingled themselves with those which were
merely political." ^

Notwithstanding this apparent subordination of economic
to political considerations, Marshall in fact declared em-
phatically (as we have already seen) that "the first regular
and systematic opposition to the principles on which the
affairs of the union were administered, originated in the
measures " which were founded on Hamilton's Report on
Public Credit.'^ And he added that the Bank act "con-
tributed, not inconsiderably, to the complete organization

' Life of Washington, (2d ed.), Vol. II, p. 206. » Ibid., Vol. II, p. 181.

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 241

of those distinct and visible parties, which, in their long
and dubious conflict for power, have since shaken the United
States to their centre." ^ Marshall was even more specific.
He said that the effect of Hamilton's funding measure "was
great and rapid. The pubHc paper suddenly rose, and was
for a short time above par. The immense wealth which
individuals acquired by this unexpected appreciation,
could not be viewed with indifference. Those who par-
ticipated in its advantages, regarded the author of a system
to which they were so greatly indebted, with an enthusiasm
of attachment to which scarcely any Hmits were assigned.^
To many others, this adventitious collection of wealth in
particular hands, was a subject rather of chagrin than of
pleasure. ... Its being funded was ascribed by many,
not to a sense of justice, and to a liberal and enlightened
poHcy, but to a desire of bestowing on the government an
artificial strength, by the creation of a moneyed interest
which would be subservient to its will. The effects pro-
duced by giving the debt a permanent value, justified the
predictions of those whose anticipations had been most
favorable. The sudden increase of moneyed capital derived
from it invigorated commerce and gave a new stimulus to

' Ibid., p. 206.

» The rising tide of business prosperity which had begun before the drafting of
the Constitution and continued through Washington's first administration was
naturally attributed to the Federalist policies, and particularly Hamilton's fiscal
measures. The man who is able, declared Oliver Wolcott, Sr., "to establish a
system of public credit after it was by abuse of all public faith and confidence nearly
annihilated, so as within the short term of four years fully to restore and establish
it upon a stable basis, and by his provident care to guard against all contingencies
which might do it injury, and by the same operation raise a people from the most
torpid indolence and despondency to a state of the most vigorous enterprise, indus-
try, and cheerfulness, and increase the value of property within the same period
one third more than it was before (which I believe has been the case within this
state, notwithstanding our vast emigrations) ; he who can effect all of this with-
out imposing a sensible burden upon any one, or deranging one useful occupation
or business, must possess talents and industry and a species of intuition." Gibbs,
op. cit., Vol. I, p. 101.

242 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

agriculture. About this time, there was a great and visible
improvement in the circumstances of the people. Although
the funding system was certainly not inoperative in pro-
ducing this improvement, it cannot be justly ascribed to
any single cause. Progressive industry had gradually re-
paired the losses sustained by the war, and the influence of
the Constitution on the habits of thinking and acting,
though silent, was considerable. In depriving the states
of the power to impair the obligation of contracts, or to
make anything but gold and silver a tender in payment
of debts, the conviction was impressed on that portion of
society which had looked to the government for relief from
embarrassment, that personal exertions alone could free
them from difficulties." ^

That Marshall's great work from which these citations
are taken was dominated by a political motive cannot be
denied. Nevertheless the accuracy of his analysis of the
causes of party dissension will hardly be disputed, and its
implications are so clear as to need no further comment.
They may be strengthened and elucidated, however, by
reference to an authority scarcely less weighty, Fisher
Ames, of Massachusetts, whose experience and standing
entitle him to special respect. In a letter, written on
November 30, 1791, from Philadelphia, where he was serving
in Congress, this statesman, for such he truly was, made an
examination of the economic forces and the accompanying
class psychology which then divided the North and the
South — a section of capitalistic processes and a section
controlled by agriculturalists. In this letter he said that
the causes which brought about differences of opinion in
the two portions of the country were "equally lasting and

> Gibbs, op. cit.. Vol. I, p. 191. Mar.shall seems unawsire of the fact that it was
government aid that had helped the Federalists out of their difficulties.

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 243

unpleasant. To the northward, we see how necessary it is
to defend property by steady laws. Shays confirmed our
habits and opinions. The men of sense and property, even
a little above the multitude, wish to keep the government
in force enough to govern. We have trade, money, credit,
and industry, which is at once cause and effect of the others.
At the southward, a few gentlemen govern ; the law is their
coat of mail; it keeps off the weapons of the foreigners,
their creditors, and at the same time it governs the multi-
tude, secures negroes, etc., which is of double use to them.
It is both government and anarchy, and in each case is
better than any possible change, especially in favor of an
exterior (or federal) government of any strength ; for that
would be losing the property, the usufruct of a government,
by the state, which is Hght to bear and convenient to man-
age. Therefore, and for other causes, the men of weight
in the four Southern states (Charleston city excepted) were
more generally antis, and are now far more turbulent than
they are with us. Many were federal among them at first,
because they needed some remedy to evils which they saw
and felt, but mistook, in their view of it, the remedy. A
debt-compelling government is no remedy to men who have
land and negroes, and debts and luxury, but neither trade
nor credit,' nor cash, nor the habits of industry, nor of sub-
mission to a rigid execution of law. My friend, you will
agree with me, that, ultimately, the same system of strict
law, which has done wonders for us, would promote their
advantage. But that relief is speculative and remote.
Enormous debts required something better and speedier !
I am told, that to this day, no British debt is recovered in
North Carolina. . . . Patrick Henry, and some others of
eminent talents, and influence, have continued antis and
have assiduously nursed the embryos of faction, which the

244 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

adoption of the Constitution did not destroy. It soon
gave popularity to the antis with a grumbling multitude.
It made two parties.

"Most of the measures of Congress have been opposed
by the southern members. . . . The funding system, they
say, is in favor of the moneyed interest — oppressive to the
land ; that is, favorable to us, hard on them. They pay
tribute, they say, and the middle and eastern people, holders
of seven-eighths of the debt, receive it. And here is the
burden of the song, almost all the little that they had and
which cost them twenty shilling for supplies or services,
has been bought up, at a low rate, and now they pay more
tax towards the interest than they received for the paper.
This tribute they say, is aggravating, for all the reasons be-
fore given ; they add, had the state debts not been assumed,
they would have wiped it off among themselves very speed-
ily and easily. Being assumed, it has become a great debt ;
and now an excise, that abhorrence of free states. . . .
Faction glows within [the southern states] like a coal pit.
The President lives — is a southern man, is venerated as
a demigod, he is chosen by unanimous vote, etc., etc.

Change the key and You can fill up the blank.

But, while he lives, a steady prudent system by Congress
may guard against the danger. . . . Yet, circumstanced
as they are, I think other subjects of uneasiness will be
found. For it is impossible to administer the government
according to their ideas. We must have a revenue ; of
course, an excise. The debt must be kept sacred ; the
rights of property must be held inviolate. We must, to
be safe, have some regular force, and an efficient militia. . . .
In fine, those three states are circumstanced not unlike our
state in 1786. ... I will confess my belief that if, now, a
vote was to be taken, 'Shall the Constitution be adopted,'

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 245

and the people of Virginia, and the other more southern
states (the city of Charleston excepted), should answer
instantly according to their present feelings and opinions,
it would be in the negative." ^

Finally, we may say again that the great Federalist
colleague of Marshall and Ames, Hamilton, waged his polit-
ical battle on the assumption that the Jeffersonian party
was the party of opposition to his fiscal measures. As
early as 1792, he had announced the two cardinal reasons
why the friends of the Constitution and public credit should
unite against Jefferson. In his famous papers signed "An
American," he declared: "1st. That while the Constitu-
tion of the United States was depending before the people
of this country for their consideration and decision, Mr.
Jefferson, being in France, was opposed to it in some of its
most important features, and wrote his objections to some
of his friends in Virginia. That he at first went so far as
to discountenance its adoption, though he afterwards
recommended it, on the ground of expediency in certain
contingencies. 2d. That he is the declared opponent of
almost all the important measures which have been devised
by the government, more especially the provision which has
been made for the public debt, the institution of the Bank
of the United States, and such other measures as relate to
the public credit, and the finances of the United States." ^

' Life and Works of Fisher Ames, Vol. I, pp. 103 S. That the debts due in the
South to the British were one of the chief sources of strength to the Republican
opposition was also the opinion of Oliver Ellsworth. Writing to Oliver Wolcott, Sr.,
from Philadelphia, on April 4, 1794, he said : "The debts of the South, which were
doubtless among the causes of the late Revolution, have ever since operated to
obstruct its benefits, by opposing compulsive energy of government, generating
mist and irritation between this country and Great Britain, and of course giving a
baleful ascendance to French influence. Under these auspices, an extensive com-
bination of the wicked and the weak has been arranged for some time past, and will
probably continue its efiforts to disturb the peace of this country so long as the
European contest continues in its present state of dubiety." Gibbs, op. cit., Vol. I,
p. 134. J Works (Lodge ed.), Vol. VI, p. 317.

246 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

It was this affiliation of Jefferson with the party of opposi-
tion to the Constitution and the entire capitahstic system
that led Hamilton to engage in bitter personal controversy.
He declared that he had remained silent and suffered many
indignities until he saw the real nature of the opposing
party. Then and only then had he taken up arms. " When
I no longer doubted/' he said, "that there was a formed
party deliberately bent upon the subversion of measures,
which in its consequences would subvert the government ;
when I saw that the undoing of the funding system in par-
ticular (which, whatever may be the original merits of that
system, would prostrate the credit and the honor of the
nation, and bring the government into contempt with that
description of men which are in every society the only firm
supporters of government) was an avowed object of the
party, and that all possible pains were taken to produce
the effect, by rendering it odious to the body of the people,
I considered it as a duty to endeavor to resist the torrent,
and, as an effectual means to this end, to draw aside the
veil from the principal actors.

jf 1

Note to Chapter VIII

One striking feature of this partisan conflict was the absence of any considerable
appeal to the working classes or " mechanics " in the towns. Of course, the Repub-
licans, in attacking the "aristocracy of wealth," naturally struck a responsive chord
in the breasts of the poor, but neither the Republicans nor the Federalists seem to
have paid much attention to capturing the vote of the mechanics. Even Hamil-
ton, who was so deeply concerned in the growth of manufactures, docs not appear
to have given that consideration to the labor vote which its importance demanded.
Nevertheless, he did not overlook the matter, for among the various fragments pre-
sei-\'ed in his manuscripts, there appears the following passage: "They [the Anti-
Federalists] pretend to hate great men and to love and protect the common people.
Yet abused and insulted citizens, this very faction has never ceased to resist every
protection or encouragoment to arts and manufactures. The body of useful
mechanics now rising into a well-earned importance in society well know that this
faction have done all they could to throw them back again into the forlorn condi-

» Works (Lodge cd.). Vol. VI, p. 386. Italics mine. See above for Hamilton's
view aa to the character of the "firm supporters of government," p. 6.

FEDERALIST ANALYSIS OF THE PARTY CONFLICT 247

tion where the weakness of the old government left them to struggle." {Hamilton
Mss., 1794 ; last sheet in Vol. XV.)

The widespread conviction, which had high authority in Jefferson's Notes on
Virginia (see below, p. 422), published in 1786, to the effect that a working class was
servile in character, depraved in manners and morals and, therefore, not to be
desired in the United States, was the subject of occasional discussion. The Fed-
eralists, of course, refused to admit the doctrine of innate depravity ascribed to
capitalism by the Republicans, and as a last resort they pointed out that the
menial working man could escape at will from his thraldom by taking up lands in
the west. "It has been insinuated," says a writer in the Gazette of the United
States, "that the establishment of manufactures will tend to make menials of our
citizens while they are immured in the factories constructed for carrying on the
works. But let it be remembered that we are all under just and equal laws, that
every man is free to chuse what occupation he pleases and that our boundless wes-
tern territories will forever afford a retreat from domestic impositions. ... It is
highly probable that much higher wages can be afforded to manufacturers and
artists than are usually paid to those descriptions of persons in Europe, particularly
in Great Britain — for it is evident that while the great body of manufacturers
continue poor and dependent, the proprietors amass immense fortunes. The
establishment of manufactures in this country has long been a very desirable event.
— This will afford a new source of employment for the poor which will be con-
stantly increasing." (The Gazette of the United States, September 7, 1791.)

An illuminating article on slavery and labor in the Gazette of the United States
for May 6, 1789, contains the following penetrating passage in economics: "It
must be allowed that in all societies, subordination and servitude are in some
degree necessary — these naturally imply superiority and power : Power, therefore
cannot be supposed in itself unjust, but only the abuse of that power : A frequent
change or rotation of property, occasioned by the introduction of commerce into
many of the European states has greatly checked this wanton exercise or abuse of
power ; and in many of those states has by degrees, totally abolished that villanage
which existed in the primitive ages. Yet, as in all civilized states, an excess of
poverty will be the inevitable lot of some, it may therefore naturally be expected
that the poor in general will experience a certain degree of dependence and servility.
... If the state of the poor may be supposed in some respects preferable to that
of the African slaves, yet I am of opinion, that in other respects it may some-
times be less eligible, unless we should allow an equal degree of sensibility to man-
kind in every state and condition. ... Be that as it may, all Europe evinces
that where there are no Black men, there must be white men to do the menial,
and other servile oflSces requisite in society ; or in other words, where there are no
black slaves, there must be white slaves."

CHAPTER IX

ANTI-FEDEKALIST RESISTANCE TO TAXATION

So violent was the opposition to Hamilton's funding
system that it required only another irritant to transform
the popular anger into open defiance of the law and the
government. This irritant was supplied by the Excise
Act, which passed the House of Representatives on Jan-
uary 25, 1791, and was approved by the President on March 3
of that year. That measure had been a part of Hamilton's
original scheme as outlined in his first Report on the Public
Credit and had grown directly out of another report com-
municated to the House on December 13, 1790. At the
latter date, the assumption of state debts had been carried
and the Secretary of the Treasury estimated that $826,624.73
was necessary to meet the new charges and the slight esti-
mated deficit in the funds already established.^ In recom-
mending an excise on spirits Hamilton seems to have been
anxious, for many reasons, to avoid a direct tax on lands.
"It has become an acknowledged truth," he said, "that, in
the operation of those [excise] taxes, every species of capital
and industry contribute their proportion to the revenue, and
consequently, that, as far as they can be made substitutes
for taxes on lands, they serve to exempt them from an un-
due share of the public burden."

As soon as the excise measure was taken up in the House,
Jackson, of Georgia, the leader of the opposition to the
funding bills, renewed his assaults on the fiscal system
and bitterly attacked the excise as an auxiliary to it. He

> State Papers: Finance, Vol. I, p. 64.
248

ANTI-FEDERALIST RESISTANCE TO TAXATION 249

set out to show that the tax was odious, unequal, unpopular,
and oppressive, particularly in the Southern states, where
spiritous liquors had become necessary articles and where
breweries and orchards furnished no substitutes. Jackson
then sketched the history of excises in England: "He
said that they had always been considered by the people
of that country as an odious tax, from the time of Oliver
Cromwell to the present day ; even Blackstone, a high
prerogative lawyer, had reprobated them. He said, he
hoped this country would take warning by the experience
of the people of Great Britain, and not sacrifice their liber-
ties by wantonly contracting debts which would render it
necessary to burthen the people by such taxes as would
swallow up their privileges ; . . • and by an indication of
several particulars he showed its unequal operation in the
southern states. It will deprive the mass of the people of
almos^ the only luxury they enjoy, that of distilled spirits."
Parker, of Virginia, warmly seconded Jackson and warned
his colleagues that the excise tax would ''convulse the
government." ^

In spite of the opposition from the Southern delegates
particularly, the bill passed the House on January 25, by
a large majority. It appeared to be necessary to sustain
the public credit, for without the additional revenue the
interest on the debt could not be paid. It is probable that
it was with unmixed feelings that the "old guard" of se-
curity holders, Ames, Benson, Boudinot, Carroll, Clymer,
Fitzsimons, Gerry, Gilman, Goodhue, Lawrence, Sedgwick,
Sherman, Sturges, and Wadsworth, voted to impose the
excise on spirits distilled in the United States. Madison ^

1 Annals of Congress, Vol. II, pp. 1890 ff.

' Madison declared that he was opposed to an excise tax, but that money must
be forthcoming to sustain the government and that it was evident that the House
was not prepared to lay a tax on land. Annals of Congress, Vol. II, p. 1894.

250 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

voted with them, but the South furnished most of the
opposition vote. Hathorn and Van Rensselaer from New
York, Hartley, Heister, and P. Muhlenberg, from Pennsyl-
vania, joined their Southern colleagues in resisting the tax.
This opposition from the South and from Pennsylvania
is explicable on purely economic grounds. The excise
law, as finally passed, imposed a certain duty on imported
spirits, a graded excise on spirits made from molasses and
other imported products, and a small graded excise on those
distilled from grain. It would thus appear that there was
some discrimination against New England, where most of
the spirits distilled from molasses were made. On examina-
tion, however, it will be found that the New England spirits
were made in distilleries of considerable size and that the
manufacturers, without much difficulty, could shift the tax
to the consumer, thus making it almost impalpable. In
the country districts of New England, where spirits could
not be afforded, the farmers relied upon hard cider as a
strong drink. To the southward, on the other hand, par-
ticularly in Pennsylvania, Maryland, Virginia, and North
CaroHna, where spirits were distilled from grain, the manu-
facture of liquor was not concentrated in large plants, but
widely distributed among the farmers. The state of Pennsyl-
vania alone was estimated to have at least five thousand
distilleries.^ A great deal of this hquor was made for

• Hildreth, op. cit., Vol. I, p. 256. The economic situation in western Pennsyl-
vania is thus described by a descendant of one of the participants in the events
connected with the insurrection: "The four western counties, at the time of the
Western Insurrection, or riots (Westmoreland, Fayette, Washington, and Alle-
ghany), contained about seventy thousand inhabitants, scattered over an extent of
country nearly as great as that of Scotland or Ireland. Except Pittsburgh, which
contained about twelve hundred souls, there were no towns except a few places ap-
pointed for holding the courts of justice in each county. There were scarcely any
roads, the population had to find their way as they could through paths or woods,
while the mountains formed a harrier which could only be passed on foot or on
horseback. The only trade with the East was by packhorse ; while the navigation
of the Ohio was closed by Indian wars, even if a market could have been found by

ANTI-FEDERALIST RESISTANCE TO TAXATION 251

domestic or at least local use, although not a little was
transported to the cities for trade, that being one of the
most economical forms in which grain could be carried to
market. In Pennsylvania and the Southern states, there-
fore, the excise duty fell as a sort of direct tax on the farm-
ers and set thousands of backwoods communities in
turmoil.^

The effect of the measure was instantaneous. In fact,
while it was under consideration, the legislature of Pennsyl-
vania, then sitting in Philadelphia, where Congress was
holding its sessions, passed resolutions denouncing the bill,
and shortly afterward the Virginia, Maryland, and North
Carolina legislatures joined in the protest. Before long
Washington learned that revolt was brewing in the regions
adversely affected by the tax, but he could not bring him-
self to believe that the opposition was serious. Indeed,
he wrote to Lafayette in July : "On the 6th of this month
I returned from a tour through the southern states, which
had employed me for more than three months. In the
course of the journey, I have been highly gratified in ob-
serving the flourishing state of the country and the good
dispositions of the people. . . . The attachment of all

descending its current. The farmers having no markets for their produce, were from
necessity compelled to reduce its bulk by converting their grain into whiskey ; a horse
could carry two kegs of eight gallons each, worth about fifty cents per gallon on this
[western], and one dollar on the other side of the mountains, while he returned with
a little iron or salt, worth at Pittsburgh, the former fifteen to twenty cents a pound
the latter five dollars per bushel. The still was therefore the necessary appendage
of every farm, where the farmer was able to procure it ; if not, he was compelled to
carry his grain to the more wealthy to be distilled. In fact, some of these distil-
leries on a large scale, were friendly to the excise laws, as it rendered the poorer
farmers dependent upon them. . . . This tax created a numerous host of petty
officers, scattered over the country as spies on the industry of the people, and
practically authorized at any moment to inflict domiciliary visits on them, to make
arbitrary seizures and to commit other vexatious acts ; the tax was thus brought
to bear on almost each individual cultivator of the soil." H. M. Brackenridge,
History of the Western Insurrection, p. 17.

252 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

classes of citizens to the general government seems to be
a pleasing presage of their future happiness and respect- -
ability." 1

However, the President was not permitted long to erifoy
this tranquil assurance of obedience to the excise law.
Protest meetings began to appear here and there in the
disaffected regions and committees similar to those which
had engineered the Revolution were organized in many
counties preparatory to resisting the enforcement of the
law. The unrest was not confined to obscure farmers. /\
Prominent leaders, many of whom had been open opponents
of the Constitution a few years earlier, began to assume
control of the movement, and at length Congress, evidently
somewhat frightened, abolished the tax on the smaller
stills, by a law approved May 8, 1792, thus averting a
crisis in Virginia and North Carolina.

In the debate on this revision of the law, the antagonism
of the small farmers to the capitaHstic poHcy of the govern-
ment again became clearly apparent. Steele, of North
CaroUna, declared that the law had been opposed because
"it operates, and is in fact, a tax upon this occupation
[distilhng] and agriculture, as they stand connected in one
part of the union, while manufactures in other parts are
not only rewarded by high protecting duties, but in some
instances even by specified bounties. The agricultural
interest has experienced the unfavorable influence of this
law likewise, and it operates most oppressively too upon
that class of farmers whose estates are situated in the in-
terior country, and whose interests have thus far passed
almost unnoticed in the policy of the general government.
That class of citizens, though they have not been most
solicitous, are nevertheless not insensible of their burdens,

» Writings (Sparks cd.), Vol. X, p. 180.

ANTI-FEDERALIST RESISTANCE TO TAXATION 253

and the neglect with which their interest has been treated.
The value of our lands has been stationary for some time;
its produce not in demand, and, where it is, at depreciated
prices ; and notwithstanding this, taxes are imposed, evi-
dently calculated in their operation to render agriculture
tributary to the more favored branches of business. . . .
If a farmer is possessed of a given quantity of rye for sale,
money cannot be obtained for it at any price — he sends
it to a distillery, where one-half of it is given in the first
instance for manufacturing the other. The duty is then
to be paid out of the farmer's part, which reduces the
balance to less than one-third of the original quantity.
If this is not an oppressive tax, I am at loss to describe
.what is so ; and if a proposition had been made to lay a
similar tax upon American porter, nails, paper, shoes, or
any other article of this kind, we should not shortly hear
the last of it. And here let me ask, what is in the nature
of these manufactories which entitles them to such priori-
ties and preferences ? It may fairly be answered that they
are nearer to perfection, that they are aided by more capital,
that they are therefore better able to bear taxation, and that
the advantages which they now enjoy have been derived
from the generosity of members representing the agricultural
parts of the country. It is most sincerely to be wished that
the manufacturing states would fix some bounds to their
expectations. . . . The tendency of this law has been,
and, if not modified differently, will continue to be, to build
up the rum distilleries upon the ruins of those employed by
farmers for domestic uses." ^

Even the modification of the law, which seems to have
fairly satisfied the farmers of North Carolina and Virginia,
did not allay the discontent in the frontier counties of

1 Annals of Congress (2d Cong.), p. 586.

254 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Pennsylvania. On September 1, 1792, Hamilton wrote to
Washington that the continued opposition to the law in the
western survey district of that state gave the affair a more
serious aspect than it had hitherto worn and called for
vigorous and decisive measures on the part of the govern-
ment. He declared that enough moderation had been
shown and that it was time to assume a different tone, for
otherwise the well-disposed part of the community would
think the executive wanting in decision and vigor. From
that time forward the opposition grew in organization and
determination.

The administration shortly afterward decided upon the
sharp prosecution of the distillers who refused to register
and pay the tax. Indictments were found against a con-
siderable number and an attempt of the United States
marshal to serve the warrants in the summer of 1794 led
to an armed resistance in which several were killed and
wounded. The militia of the western counties was sum-
moned by the revolutionary leaders and threats were
made to the effect that they would not only defend them-
selves but also establish an independent state. At first,
the insurrectionists confined their operations to what they
called "legal measures designed to obstruct the operation
of the law," that is, to meetings, resolutions, and protests;
and their leaders disclaimed any intention of resorting to
violence. In the spirit of the American Revolution, they
proposed non-intercourse and passive resistance.

Who provoked open violence and how far the resistance
to the law would have gone if the armed forces of the fed-
eral government had not been called out have always been
matters of controversy. Washington's cabinet was divided
at first as to the seriousness of the outbreak, and writers
of Republican sympathies have consistently held that

ANTI-FEDERALIST RESISTANCE TO TAX!ATI0N 255

Hamilton's report to the President on the situation in the
western counties was inaccurate, unfair, and deUberately
designed to bring about a show of force that would strengthen
the government and the party in control.^ They also
declare that Justice Wilson's certificate to the effect that
the execution of the law by civil processes or by the federal
marshal was so far obstructed as to call for the use of armed
force, was issued ''without sufficient evidence or without a
careful investigation deliberately made." ^

Whether the circumstances actually required a military
display on a large scale or not, Washington, in August,
1794, called upon the governors of Pennsylvania, New
Jersey, Maryland, and Virginia for several thousand men
to quell the uprising, and the forces headed by Washing-
ton and Hamilton set out for the scene of disturbance.
Before the army had gone far on the journey, it was met
by delegates from the disaffected regions, who assured
Washington that the sentiments of the people were now
entirely pacific, "that the riotous indications had sub-
sided as rapidly as they had arisen ; that the courts of
justice were in full operation, and that not a single individual
could be found in opposition to the law." ^ Although
Washington received the delegates with respectful civility,
he was firmly convinced that it was inexpedient to turn
back. Consequently the troops were ordered forward,
and on their arrival at the scene of trouble, they were
broken into detachments and sent into the several dis-
tricts to secure complete submission. A small number of

1 BrackeDridge says : "The growing disposition to submit to the law, the peace-
ful service of all the writs except the last, in the immediate neighborhood of the
Inspector, and the sudden outbreak which followed, which had all the characteris-
tics of a common riot, without preconcerted design to resist, much less to overturn
the government, were passed over by the Secretary." Op. cit., p. 263.

2 Ibid., p. 264.

3 Ibid., p. 269.

256 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

the insurgents were arrested and Hamilton advised severe
measures as a lesson to those who had resisted the enforce-
ment of the law ; but milder counsels prevailed because it
was discovered that the gravity of the offences had been
exaggerated. A few were tried, and two convicted, only
to be pardoned by the President.

A study of the personnel of the rebellious movement
and of the districts disaffected shows that a very con-
siderable portion of the opposition to the excise tax in
Pennsylvania was identical with the opposition to the
ratification of the Constitution a few years before. It
was in the old Anti-Federal regions around Pittsburg ^
that the revolt broke out openly when attempts were made
to arrest those who refused to obey the law. The leader
of the more moderate faction opposed to the excise law
was Albert Gallatin, who had been a member of the Anti-
FederaHst convention assembled at Harrisburg after the
adoption of the Constitution to demand the calling of a
new convention — the same Gallatin, interestingly and
significantly enough, whom Jefferson elevated to the post of
Secretary of the Treasury when he was elected President.
Three other leaders more or less involved in the uprising
were Findley, Smihe, and Marshel, who had been members
of the Pennsylvania convention and had voted against the
ratification of the Constitution. It may be confidently
asserted that the whiskey party of 1792-1794 was in leader-
ship and rank and file largely composed of the opponents
of the Constitution, who had become, and remained, con-
sistent Republicans.

During the resistance to the excise, denunciation of the
"stock-jobbing" party was coupled with the criticism of
the obnoxious law. In fact, the leaders of the movement

I Pittsburg had been Federal in 1787.

ANTI-FEDERALIST RESISTANCE TO TAXATION 257

flatly declared that the tax would not have been necessary
at all, if the Federalists had not funded, at face value,
millions of depreciated paper from which the government
had originally secured very little return in the form of
supplies and services. It was the fiscal system that heaped
an e^iormous burden upon the taxpayer and afforded the
occasion for the inquisitorial excise law. Thus men like
Findley and Gallatin were able to denounce the excise
law as "a base offspring of the funding system." ^

Some color was given to the claim that the struggle over
the excise law was a part of the old contest over the Con-
stitution and the funding of the debt by the fact that the
federal authorities selected as excise inspector for the four
counties of Pennsylvania west of the Alleghanies and
Bedford on the east. General John Neville. This high

1 At a meeting in Pittsburg in 1791, the following resolution was passed : "Re-
solved, that having considered the laws of the late Congress, it is our opinion that
in a very short time hasty strides have been made to all that is unjust and oppres-
sive. We note particularly the exorbitant salaries of officers, the unreasonable
interest of the public debt, and the making of no discrimination between the orig-
inal holders of public securities and the transferees, contrary to the ideas of nat-
ural justice in sanctioning an advantage which was not in the contemplation of the
party himself to receive and contrary to the municipal law of most nations and ours
particularly, the carrying into effect an unconscionable bargain, where an undue
advantage has been taken of the ignorance and necessities of another ; and also
contrary to the interest and happiness of these states, being subversive of industry
by common means, where men seem to make fortunes by the fortuitous concurrence
of circumstances, rather than by economic, virtuous, and useful employment.
What is an evil still greater, the constituting a capital of nearly eighty millions of
dollars in the hands of a few persons who may influence those occasionally in power
to evade the Constitution. As an instance of this already taken place, we note the
act establishing a National Bank on the doctrine of implication, but more especialli',
we bear testimony to what is a base offspring of the funding system, the excise law >
of Congress, entitled, "An Act laying duties upon distilled spirits within the United
States, passed the 3d of March, 1791. ... It is a bad precedent, tending to in-
troduce the excise laws of Great Britain and of countries where the liberty, property,
and even the morals of the people are sported with, to gratify particular men in
their ambitions and interested measures. . . . That in the opinion of this com-
mittee, the duties imposed by the said act upon spirits distilled from the produce
of the soil of the United States, will eventually discourage agriculture, and a
manufacture highly beneficial in the present state of the country." H. M. Brack-
enridge, History of the Western Insurrection, p. 36.

258 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

officer, who was described as "a man of great wealth for
those days," ^ had been a member of the state convention
of 1787 and had there voted for the ratification of the
Constitution. It appears that at the time of the insur-
rection Neville was a holder of certificates of the funded
debt, because his son, in an advertisement published after
the sack of the General's house, declared that some of the
certificates of registered debt had been stolen.^ With a
champion of the federal Constitution and a security holder
on the one side as a federal officer and opponents of the
Constitution on the other as enemies of the excise law, it
looks quite Hke the antagonism of 1787 over again.

Although the insurrection, if such it may be justly called,
was confined to the western counties of Pennsylvania, other
sections of the country were known to have been in un-
disguised sympathy with resistance to the law, if not with
open rebelhon. The Democratic societies in many towns
rejoiced in "the return of the spirit of 1776." The Phila-
delphia Democratic society, in particular, denounced the
excise law in very violent language. Washington and!
Hamilton, therefore, had some reason for fearing thatij
it was no local uprising with which they had to deal, butj
a widespread disaffection which seriously threatened the'
stability of the federal government. The administration
naturally felt that there was no slight cause for congratu-
lation when the soldiers returned triumphantly, and it
could be announced that there was no interruption in the

> Brackenridge, op. cit., p. 31.

' Ibid., p. 51. Speaking of Neville's acceptance of the office of excise inspector,
Brackenridge says: "The claim for disinterested patriotism, in taking the office
under the circumstances, was not universally admitted ; on the contrary, some said,
that in accepting, he was influenced by its emoluments, which would not have been
the case if he had pursued the course of declining and then recommending someone
of equal respectability and capacity, and at the same time exerting his influence as a
citizen to aid him in the execution of its duties. As it was, the course pursued by
him tended greatly to increase the unpopularity of the excise." P. 21.

ANTI-FEDERALIST RESISTANCE TO TAXATION 259

enforcement of Federal law throughout the American
empire.

Even after order was restored, Washington did not re-
gard the incident as entirely closed. The insurrection had
made a profound impression on him and had moved him
to unwonted anger at every form of opposition which had
been stirred up against his administration. He refused toV
think of the affair as a mere revolt in western Pennsylvania
against the excise tax. The seriousness of the outbreak was
due, in his mind, to the growth of democracy as manifested
in the formation of Democratic societies which were at-
tacking the poHcies of the government and, by systematic
political organization, preparing to get possession of the
federal system. "The insurrection," he wrote on Sep-
tember 25, 1794, "may be considered as the first ripe fruits
of the Democratic Societies. I did not, I must confess,
expect it would come to maturity so soon, though I never
had a doubt that such conduct would produce some such
issue, if it did not meet the frowns of those, who were well-
disposed to order and good government ; for can anything
be more absurd, more arrogant, or more pernicious to the
peace of society, than for self-created bodies, forming them-
selves into permanent censors, and under the shade of ^
night in a conclave resolving that acts of Congress, which
have undergone the most deliberate and solemn discussion
by the representatives of the people, chosen for the express
purpose and bringing with them from the different parts
of the Union the sense of their constituents, endeavoring
as far as the nature of the thing will admit, to form their will
into laws for the government of the whole; I say, under
these circumstances, for a self-created permanent body (for
no one denies the right of the people to meet occasionally
to petition for, or remonstrate against, any act of the legis-

260 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

lature) to declare that this act is unconstitutional, and
that act pregnant with mischiefs, and that all, who vote
contrary to their dogmas, are actuated by selfish motives
or under foreign influence, nay, are traitors to their coun-
try? Is such a stretch of arrogant presumption to be rec-
onciled with laudable motives, especially when we see the
same set of men endeavoring to destroy all confidence in
the administration by arraigning all its acts, without know-
ing on what ground or with what information it proceeds." ^

It is evident from Washington's correspondence at this
time that he became more and more convinced of the
necessity of destroying or at least discountenancing the
Democratic societies which, by their attacks on the policies
of his administration, were undermining the foundations of
the federal government. He turned the matter over in
his -tnind carefully, consulted the members of his cabinet
smd his closest friends about it, and in his message to Con-
gress in November, 1794, he discussed at length the in-
surrection in Pennsylvania, resistance to law, the self-
created societies, and criticism of the government, leaving
it to the people to determine whether the late rebelHon
had "not been fomented by combinations of men, who,
careless of consequences, and disregarding the unerring
truth that those who rouse cannot always appease a civil
convulsion, have disseminated, from an ignorance or per-
version of facts, suspicions, jealousies, and accusations of
the whole government."

In the Senate the President's sentiments about the Demo-
cratic societies were warmly supported and the proceedings
of those associations were attacked as founded in political
error and calculated to disorganize the government by mis-
leading the citizens. In the House, however, the message

» WrUinga (Sparks ed.), Vol. X, p. 437,

ANTI-FEDERALIST RESISTANCE TO TAXATION 261

did not find the same approval. It appears that the mem-
bers were at first incHned to overlook the reference to the
self-created societies, but that staunch Federalist, Fitz-
simons, of Pennsylvania, could not restrain his feelings
and, remarking that it would be somewhat incongruous for
the House to present an address to the President and neglect
such an important part of his message, he proposed an
amendment to the address as follows: "As a part of this
subject, we cannot withhold our reprobation of the self-
created societies, which have risen up in some parts of the
Union, misrepresenting the conduct of the Government,
and disturbing the operation of the laws, and which, by
deceiving and inflaming the ignorant and the weak, ma/
naturally be supposed to have stimulated and urged the
insurrection." ^

This action stirred the Republicans in the House. They
had not openly sympathized with the insurrection, of
course, but many of them, particularly those who had
fought the enactment of the excise law, must have secretly
rejoiced in the fulfilment of their prophecies. Moreover,
they were not prepared to go on record as denouncing the
"self-created societies" whose agitations were daily adding
strength to the Republican party. The Republican leader,
Giles, after passing a high encomium upon the public ser-
vices and personal character of Washington, rather sharply
criticised the language employed by the President in his
message. He mildly suggested : "If the House are to cen-
sure the Democratic societies, they might do the same by
the Cincinnati society," which, it was well known, had by
numerous resolutions supported the fiscal system of the
Treasury Department. "If the House undertake to cen-
sure particular classes of men," Giles continued, "who can

* Annala of Congress (3d Cong.), p. 899,

262 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

tell where they will stop? Perhaps it may be advisable
to commence moral philosophers, and compose a new
system of ethics for the citizens of America. In that case,
there would be many other subjects for censure, as well as
the self-created societies. Land-jobbing, for example, has
been in various instances brought to such a pass that it
might be defined swindling on a broad scale. ^ . . . Gentle-
men were interfering with a delicate right, and they would
be much wiser to let the Democratic societies alone." ^

Another Republican, McDowell, exclaimed, "Your wanton
laws, begotten in darkness, first, raised the insurrection";
and added that the Democratic societies had done only
what other people had done, namely, denounced "the as-
sumption business and the system of funding." Chrystie
declared that the "Republican society of Baltimore was
composed of a band of patriots, not the fair weather patriots
of the present day, but the patriots of seventy-five, the men
who were not afraid to rally around the American standard
when that station was almost concluded to be a forlorn
hope." A Revolutionary soldier, who had served under
Washington, Rutherford, praised the President, but ob-
jected to his attack upon societies formed by his fellow-
citizens for political purposes. "By the turn which the
debate has now taken," he said, "if any man is in favor of
these societies, the President is drawn across his face. . . .
These societies contain many valuable and excellent char-
acters. It answers no purpose then to pass votes of this
kind. Perhaps Democratic societies sometimes have done
wrong, but this was not a proper foundation for condemn-
ing them in whole. Every government under heaven hath
a tendency to degenerate into tyranny. Let the people
then speak out. Why not let them speak out? Wliat oc-

» See above, p. 218. » AnnaU of Congreaa (3d Cong.), P- 900.

ANTI-FEDERALIST RESISTANCE TO TAXATION 263

casion is there for all this alarm among the stockholders?
A man falls from his horse, and, while stunned by the blow-
he says to his neighbor, is not the universe fallen? Just
so the paper holders have got a small alarm about their
stock on account of this war, and in their fright imagine
that the Continent is ready for an insurrection." ^

This reference to the alarm of the stockjobbers must
have stung the security holders in the House. Dayton,
the most notorious land and security speculator in the
country, had been hot in his support of the President's
criticism of the Democratic societies, and Ames of Massa-
chusetts, shortly after Rutherford's sarcastic outbreak,
exclaimed that the talk about "a paper nobility in Con-
gress" was false, adding: "There are probably not ten
members who have any interest in the funds, and that
interest very inconsiderable." ^ Other security holders,
William Smith, of South CaroHna, Sedgwick, of Massa-
chusetts, and Boudinot, of New Jersey, were among those
who spoke in favor of Fitzsimons' resolution ; but in vain,
for it did not command a majority of the House.

The division over the resolution to approve the Presi-
dent's reference to the self-created societies was very close,
the House dividing evenly on some of the minor details of
the amendment to the address.^ At length, however, the
Republicans succeeded in expunging the irritating word
"self-created" and the imphcation that the Democratic
societies had been responsible directly for stirring up the
public sentiment which culminated in the insurrection.
The Federahsts were able, nevertheless, to secure the in-
sertion of a regret "that any misrepresentations whatever,
of the government and its proceedings, either by individuals
or combinations of men, should have been made and so far

1 Ibid., p. 915. ' Ibid., p. 929. » Ihid., p. 947.

264 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

credited as to foment the flagrant outrage which has been
committed on the laws." Taking it all in all, the victory
was with the Republicans.

The general effect of the Pennsylvania insurrection and
its aftermath was not altogether favorable to the adminis-
tration party. True, the strength of the Federal Govern-
ment — its capacity to enforce the law — had been mani-
fested in a striking manner and the FederaHsts rejoiced in
what they deemed to be a newly demonstrated security.
Thought of armed resistance was at an end, but the resort
to political agitation by the Republicans was all the more
vigorous. Certainly none of the leaders in the resistance
to the excise, like Smilie, Findley, or Gallatin, were con-
verted to Federalism. The concessions which had been
made to the North Carolinians had not diminished their
political disaffection. And the standing afforded to the
Democratic societies by the embrogUo in the House of
Representatives increased for a time the activities of or-
ganizations which the Federalists openly designated as
contemptible, pernicious, and vile.^

Jefferson looked upon the whole affair as hastening the
Nemesis that was bound to come to the Federalists and as
one more illustration of the inevitable conflict between the
popular and aristocratic elements. On December 28, 1794,
he wrote to Madison, who had stood consistently against
the administration during the contest in the House, saying :
Nr"The denunciation of the democratic societies is one of
the extraordinary acts of boldness of which we have seen
so many from the faction of monocrats. It is wonderful
^ indeed, that the President should have permitted himself
to be the organ of such an attack on the freedom of dis-
cussion, the freedom of writing, printing, and pubUshing.

» Marshall, Life of Washington (2d ed.). Vol. II, p. 353.

ANTI-FEDERALIST RESISTANCE TO TAXATION 265

It must be a matter of rare curiosity to get at the modi- V
fications of these rights proposed by them, and to see what
Hne their ingenuity would draw between democratical
societies, whose avowed object is the nourishment of the
repubUcan principles of our Constitution, and the society
of the Cincinnati, a self-created one, carving out for itself i
hereditary distinctions, lowering over our Constitution
eternally, meeting together in all parts of the Union, periodi-
cally, with closed doors, accumulating a capital in their
separate treasury, corresponding secretly and regularly,
and of which society the very persons denouncing the demo-
crats are themselves the fathers, founders and high officers." ^ V
Not only did the attack on the popular societies help to V
strengthen the opposition to the fiscal party, but it increased
the widespread feeling that the extensive employment of
troops against the insurgents was a piece of unnecessary
bravado, calculated to bolster up the declining prestige of
the Federalists.^ In the letter to Madison, just quoted,
Jefferson added : "With respect to the transactions against
the excise law, it appears to me that you are all swept
away in the torrent of governmental opinions, or that we i
do not know what these transactions have been. We
know of none which, according to the definitions of the
law, have been anything more than riotous. There was
indeed a meeting to consult about a separation. But to
consult on a question does not amount to a determination
of that question in the affirmative, still less to the acting
on such a determination. . . . The excise law is an infernal
one. The first error was to admit it by the Constitution ;

^ Works (Washington ed.), Vol. IV, p. Ill; Economic Interpretation, p. 38.
The Societies and their members appear frequently among the holders of the
securities of the federal government.

' B. W. Bond, "The Whiskey Insurrection in Pennsylvania," The Randolph-
Macon Historical Papers, Vol. I, p. 78.

266 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

the second, to act on that admission ; the third and last

/ will be, to make it the instrument of dismembering the
Union, and setting us all afloat to choose what part of it

J we will adhere to. The information of our mihtia, re-
turned from the westward, is uniform that though the
people there let them pass quietly, they were the objects of
their laughter, not of their fear; that one thousand men
could have cut off their whole force in a thousand places
of the Alleghany ; that their detestation of the excise law
is universal, and has now associated to it a detestation of
the government ; and that a separation which was perhaps
a very distant and problematical event is now near, and
certain, and determined in the mind of every man. I
expected to have seen some justification of arming one part
of the society against another ; of declaring a civil war the
moment before the meeting of that body which has the sole
right of declaring war ; of being so patient of the kicks and
scoffs of our enemies, and rising at a feather against our
friends; of adding a milHon to the pubhc debt and de-
riding us with recommendations to pay it if we can, &c.,
&c. . . . However, the time is coming when we shall
fetch up the leeway of our vessel. The changes in your
House, I see, are going on for the better, and even the
Augean herd over your heads [the Senate] are slowly purg-
ing off their impurities."

Whether Jefferson accurately described the situation in
this letter, it is certain that he reflected the sentiment of

vmany Repubhcans. They did not openly praise the violence
of those who resisted, with arms, a tax which they had re-
sisted by argument in the sphere of poUtics. Formally,

' they approved the action of the government in enforcing
the law, but they made great political capital out of the
conflict. Western Pennsylvania avenged herself by send-

ANTI-FEDERALIST RESISTANCE TO TAXATION 267

ing Republican Representatives to Congress down until the
great revolution of 1800 and beyond. Everywhere those
who had fought the economic measures of the federal gov-
ernment only redoubled their efforts to get possession of
that government at the ballot box. The sage of Monti-
cello, in retirement, was biding his time.

CHAPTER X

THE ECONOMICS OF THE JAY TREATY

On November 19, 1794, about a week before the House
of Representatives began its long and acrimonious debate
over the President's reference to the self-created Demo-
cratic societies, there was signed a treaty between England
and the United States which was destined to aggravate,
as much as any other measure of the administration except
the funding of the debt, the partisan bitterness then per-

Vneating the country. It afforded a peculiar opportunity
for agitation to Jefferson and his followers, because it enabled
them to detach from the Federalist cause some of themer-^,
cantile interest and a considerable number of the largoj
planters of the South. It did more. It enabled them to'

. connect Federalism with subserviency to the hated mon-
archy against which independence had been declared less
than twenty years before, and to identify Republicanism
with that patriotic pride and heroic valor which had sus-
tained the declaration on the battle field. It permitted them
to bring out, even more emphatically than ever, that antag-
onism between capitalism and agrarianism which had been

*^he source of the troubles of the new federal government.
It is no part of the purpose of this work to trace all of the
intricate details of the contest between the United States
and Great Britain which brought them to the verge of war
in 1794. However, a few of the economic aspects of that
conflict which bear upon the party contests at home must be
pointed out. One important feature of the struggle was

2G8

THE ECONOMICS OF THE JAY TREATY 269

the injury inflicted upon Northern commercial interests by
the poHcy of the mother country. When war broke out
between England and France in 1793 the latter nation,
which had hitherto shown as little regard for American
interests as the former, opened to neutrals the trade with
the French West Indies. This action, though dictated by
economic necessity, afforded the Republicans a pretext for
claiming the special friendship of the country which had
just embarked upon the paths of revolution. At first, the
prospect seemed highly gratifying to the commercial in-
terests of the United States, but this hope was short lived.
The British government, as a war measure, declared all
ships of neutrals engaged in this trade with the French
West Indies liable to seizure, and hundreds of American
vessels and thousands of seamen soon fell into the hands
of the British. This irritating order was scarcely in effect
before it was followed by a decree condemning all ships
carrying goods belonging to French citizens, — another
deadly blow to American commercial interests.

It is useless to discuss here the fine points in international V
law involved in this action on the part of Great Britain.
Its effect on the people of the United States may well be
imagined. The newspapers printed horrifying stories of
the seizure of fine merchant vessels, the cruel treatment of
American sailors who had been thrown into prison, if ac-
counts may be believed, more than half naked, and other
outrages against the nationals of the United States. The
commercial interests, North and South, which had quite
uniformly been Federalist in sympathy, began to incline
a more kindly ear toward the Republicans who frankly
avowed their hatred for Britain and their affiliations with
the French revolutionists. Ship building suffered grave
losses and unemployment spread throughout that and

270 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

allied trades, giving the working classes involved a prac-
tical illustration of what was represented as the folly of

V supporting a party evidently British in sympathy.

There were special economic reasons which made the
controversy with Great Britain highly acceptable to some

■>/of the larger planting interests of the South. ^ It afforded
just the desired opportunity to postpone or perhaps defeat
altogether the enforcement of Article IV of the treaty of
peace of 1783 (which closed the War of Independence) to
the following effect: "It is agreed that creditors on either
side shall meet with no lawful impediment to the recovery
of the full value in sterling money of all bona fide debts
heretofore contracted." As is generally known, the debts
due to British merchants and other private citizens con-

^ stituted one of the powerful causes leading to the Revolu-
tion, particularly among the better classes ; and during the
War various schemes of confiscation and sequestration had
been employed to "sponge off the slate." After peace was
established, attempts were made by British creditors to
collect their just debts, with little success, especially in the
South. In the North, the debtors were more prompt, as the
newspapers would have it, on account of their superior
sense of business honor ; but it would seem that they made
a virtue of necessity. Being commercial and mercantile in
their interests and dependent upon Great Britain for credit
. and capital, they found it expedient to settle the old scores.

' "The affairs of this country appear to be vergipg to some important crisis.
The opposition to the measures which have been adopted, conduct as if they were
influenced by something more than rivalry and personal ambition. . . . The
best solution which I can give of this disquiet is the pressure of the foreign debts
duo from the Virginia planters ; these, they imagined had been thrown off. The
effect of the treaty and of the Constitution is to make them responsible ; at least,
this is believed, though no decision of this question has been made by the national
judiciary. The prospect of poverty and dependence to the Scotch merchants ia
what they cannot view with patience. They seem determined to weaken the pub-
lic force, so as to render the recovery of these debts impossible." Oliver Wolcott,
Jr., February 8, 1793 ; Gibbs, op. cit., Vol. I, p. 86.

THE ECONOMICS OF THE JAY TREATY 271

From the British point of view, the situation in the
United States with regard to the collection of these debts
is well summed up in a pamphlet bearing the title of A
Review of the Laws of the United States of North America,
pubhshed in London, in 1790. The writer makes the fol-
lowing discrimination among the states : " Property is best
secured and more easily attainable in the state of New York
than in any other and the practice of the courts liere and in
New Jersey bears the nearest resemblance to that of West-
minster Hall. In Georgia, South and North Carolina,
British, debts are recovered with infinite difficulty, such
actions being discountenanced by the bench and where not
denied by the laws are the same in effect by the delays and
other impediments thrown in the way of them. Where the
demand is prior to the treaty of peace, the judges assume a
discretionary power and the first generally falls to the ground
while later claims are so much impeded and procrastinated
that they are seldom recovered till the end of two or three
years and then the debtor easily finds a way of making over
his effects and going into gaol for a few days, from whence
he is altogether liberated and exonerated. In Maryland
the creditors are fettered with an installment bill. In Vir-
ginia, Delaware, Pennsylvania, and New Jersey, the means
of liberation are equally easy to the debtor and though in
more northern states debts are better secured and there is
somewhat less opening for fraud and evasion, yet even there,
if a man who goes to law for a British debt has the good luck
to get over the frowns of the bench and the unpopularity
which is sure to be stamped upon his character, he may be
considered fortunate in recovering his property at the end
of three years. ... In Virginia no alien can hold lands nor
alien enemy maintain an action for money or other person-
alty. The lands of the aliens are forfeitures to the state and

272 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

to an action brought by an alien defendant may plead Hhat
he is an alien enemy' which extinguishes his right in the
hands of the debtor."^

N/- It would seem that the greatest offender in this matter
of resistance to the collection of debts was appropriately
enough the greatest debtor, Virginia. We have Jefferson's
testimony to the effect that his state was the most heavily
in debt. "Virginia," he wrote, "certainly owed two mil-
lions sterling to Great Britain at the conclusion of the war.
Some have conjectured the debt as high as three millions.
I think that state owed near as much as all the rest put
together. This is to be ascribed to peculiarities in the

I tobacco trade. The advantages made by the British mer-
chants, on the tobacco consigned them, were so enormous,
that they spared no means of increasing those consignments.
A powerful engine for this purpose, was the giving good
prices and credit to the planter, till they got him more im-
mersed in debt than he could pay, without selling his lands
or slaves. They then reduced the prices given for his
tobacco, so that let his shipments be ever so great, and his
demand of necessaries ever so economical, they never per-
mitted him to clear off his debt. These debts had become
hereditary from father to son, for many generations, so that
the planters were a species of property, annexed to certain

Vmercantile houses in London." ^

V In addition to the debts owed to the British, there was

another factor which helped to drive the slave-owning

I planters of the Southern states into closer sympathy with

the Republicans in the back regions — that was the refusal

' Copy in the New York Public Library. By questioning Republican members
of Congress, Jefferson found that there was in fact "no obstruction" to the collec-
tion of debts in the South. Works (Washington ed.), Vol. Ill, p. 409.

* Jefferson, Works (Washington ed.). Vol. IX, p. 250. See Wolcott's estimate,
below, p. 298.

THE ECONOMICS OF THE JAY TREATY 273

of the British to pay for several thousand slaves who had V
been carried off at the conclusion of the Revolutionary War
without compensation to the owners.^ The Treaty of
peace of 1783 had provided that his Britannic Majesty
should withdraw his troops with all convenient speed and
"without causing any destruction or carrying away any
negroes or other property of the American inhabitants." |
Notwithstanding the clear provision of the treaty, it was
claimed that thousands of slaves had been taken out of the
country by the British soldiers and set free. The owners
of the slaves had demanded the return of their property or
compensation and had failed to secure either. This griev-
ance afforded justification, in the states most deeply con-
cerned, to those who resisted the payment of the private.
debts to British creditors.^

Here was, therefore, a mass of economic discontent Y
which the Republicans could use to the greatest advantage
in augmenting the agrarian dissatisfaction over the fiscal
system of the Treasury Department.^ Obviously, from the
point of view of practical politics, it was good tactics for the \
opposition party to throw the blame for commercial diffi-
culties on the administration and to delay still further the
payment of the debts due to British creditors. Another
way of embarrassing the Federalists was to force a war, or
at least drive the government to the verge of war with Great

1 Jefferson estimated the number of slaves taken off by the British during a
single campaign at one-fifth of the entire negro population of Virginia. Grigsby,
History of the Virginia Federal Convention, Vol. I, p. 8 n.

* Edward Carrington, in a letter to Hamilton, put the "Democratic societies,
British debtors, and other factions" in the Anti-Federalist party. Hamilton
Mss., August 25, 1794.

' For further information on the contests over debts in Maryland, see J. F.
Mercer, An Introductory Discourse to an Argument in Support of the Payments made
of the British Debts into the Treasury of Maryland during the late War, and Strictures
on Mercer's Introductory Discourse relative to the Payments made of the British Debts
(London, 1790 ; New York Public Library).

274 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Britain, thus depreciating securities and deranging the
financial system by disorganizing the revenues. That such
was the object of so conservative a Republican as Madison
can hardly be imagined. In fact, he distinctly disavowed
the motive, but he thereby admitted its existence in the
minds of some of his partisan colleagues.

The method pursued steadily by the Republicans, with
some support from Federalists of uncertain faith, like Jona-
than Dayton, brought out very clearly in Congress the
economic issues at stake in the controversy with Great
Britain. On January 3, 1794, Madison, acting upon a
report on commerce prepared by Jefferson, proposed a series
of resolutions providing for restrictions and retaliations
aimed at Great Britain ; later Jonathan Dayton proposed
sequestration of British debts ; still later the House passed
a non-importation bill only to meet defeat in the Senate by
a close margin, the Vice-President casting the vote which
saved the day for the Federalists.^

In the debates on these measures, the economic character
of the antagonism between the party of negotiation and the

Vparty of aggression was definitely set forth. The represent-
atives of the former declared that an interruption of trad-
ing relations with Great Britain meant irreparable loss to
American merchants, a diminution of revenues which would
lead to the impairment of public credit and a fall in stocks,

\ and a destruction of that private credit with British capital-
ists which was so essential to the advancement of kindred
interests in the United States. Some Federalist speakers
stressed one factor and some another, but none of them
strayed very far from the main issues at stake. The Re-
publicans, on the other hand, being the agrarian opponents

>vof capitahsm, thought these were the very reasons why a

» Anncds of Congress (3d Co0g.), pp. 155, 535.

THE ECONOMICS OF THE JAY TREATY 275

bold and defiant attitude should be taken toward GreatV
Britain. In their hatred for the "stock jobbing and bank-
ing" group they were willing to go to great lengths, particu- \
larly in view of the fact that chaos in foreign relations
meant at least a temporary relief for Southern creditors and
no serious difficulties for the farmers anywhere.

In unfolding their programme, the champions of peace and
negotiation devoted no little time to demonstrating the
enormous impo:^tance of the British trade as compared with
the trade of other countries, particularly France. They
showed very clearly the fallacy of those who contended that
the United States received larger and more generous com-
mercial privileges at the hands of France than of Great
Britain. "Accustomed as our ears have been," said Wil-
liam Smith, speaking from data furnished to him by Ham-
ilton, "to a constant panegyric on the generous policy of
France towards this country in commercial relations, and to
as constant a philippic on the unfriendly, illiberal, and
persecuting policy of Great Britain towards us in the same
relations, we naturally expect to find in a table which ex-
hibits their respective systems, numerous discriminations
in that of France in our favor, and many valuable privileges
granted to us, which are refused to other foreign countries ;
in that of Great Britain frequent discriminations to our
prejudice, and a variety of privileges refused to us which
are granted to other foreign nations. But an inspection of
the table will satisfy every candid mind, that the reverse of
what has been supposed is truly the case." ^ This assertion
he amply supports in an extended review of the commercial
relations of the United States with England and France.

Having proved from the exports and imports that the
overwhelming preponderance of American trade abroad was

» Ibid., p. 176.

276 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

with England rather than France, Smith went carefully into
the relation of credit to the volume of capital and showed
that American merchants could obtain far more credit, and
therefore a greater augmentation of their working capital,
Vfrom British than from French merchants. In other words,
trade with the mother country, in addition to affording
ordinary economic advantages, fitted into the scheme for

% expanding the fluid capital in the hands of the merchants,
which Hamilton had so ingeniously worked out in his Re-
port on the Public Credit. In short, it was the same battle
over again, or rather another battle in the long campaign
5S- begun with the adoption of the Constitution, and Smith
was speaking on the authority of Hamilton and employing
facts and arguments devised by him. Indeed the following
passage in Smith's speech may very well have been written
by the Secretary of the Treasury : "It has been said, that
France can supply us with many articles better than Great

. Britain. This expression, better, ought to include credit, as
well as price and quality ; for, if we stand in need of credit,
that country which cannot give it to us, cannot supply us
on as good terms as the country which can. Now, it is
known that the merchants of France are unwilling or unable
to give competent credit to our merchants. . . . Among
the contrivances used to depreciate the value of our com-
mercial connexion with Great Britain, is this, that the
credit which she gives us is pernicious, by inducing us to

^run in debt. As well might it be said, that the credit which
a settler of new land obtains, upon the land which he has
purchased, or that which a tailor gets upon the cloth which

'^h.e works up, in the course of his trade, is prejudicial. The
truth is that credit, though liable to abuse, is the substitute for

' capital in all trades, and that it serves to foster them, and
increase the mass of industry, though the slothful and ex-

THE ECONOMICS OF THE JAY TREATY 277

travagant suffer by it. In a young country, like ours, it is (
an essential nutriment." ^ v

It was the reduction of credit, the serious limitation on
the quantity of fluid capital,^ which Smith emphasized in
attacking the later proposal of Dayton to sequester British
debts. "If in contempt of the law of nations," he said," we V
seize on private debts, we shall forever forfeit all credit ;
no trust can be reposed in our citizens, and no faith in our
government. No foreign merchants will ever deal on credit
with our citizens, from a well guarded apprehension that,
in case of a war between the countries, the sacred nature of |
private contracts will not protect them against the hand of
a Government which has exhibited the example of a deliber-
ate violation of the laws of nations. When we consider the
immense advantages that can be derived from private credit
and national honor, it will be easy to imagine the infinite
mischief that must result from a disregard of those princi-
ples." 3 ^

The question of sustaining the national credit by keeping
peace with England was taken up by Hartley, who called the
attention of the House to the great pains at which Congress
had been, under the Constitution, to provide for the Revolu-
tionary debt. "Adequate funds were established," he said,
"and the legislature, by the same law, solemnly engaged
that those funds should be applied accordingly. The legis-
lature was not to invade or alter those funds without regular
and adequate substitutes. By the resolutions [of retali-
ation] offered, the funds will most assuredly (in my mind)
be endangered. We are going upon speculations, the con-

' Annals of Congress (3d Cong.), p. 190. Italics mine.

' See R. Morris' view that a treaty with Great Britain would help land specula-
tion and other capitalist ventures. Mss. Private Letter Book, Vol. I, p. 80 (March 16,
1795). Morris sold a million acres of land in England in 1791 for $75,000. Pri-
vate Letter Book, Vol. I, p. 113. ' Annals of Congress (3d Cong.), p. 554.

278 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

sequences of which we know not ; and which may shake
the fundamental principles of public credit, which has been
so solemnly guaranteed. We ought not to act like mere
colonieS; in proposing or entering into non-importation
agreements. We are a nation ; we ought to conduct our-
selves in such a manner as not to endanger the faith, credit,
and reputation of America, , , . We are, in this business,
not barely waging a commercial war against Britain, for
many citizens of this country have their all depending upon
public faith." ^

Although Hartley thus admitted that the importance of
protecting the public creditors weighed with him in consider-
ing all propositions affecting the revenues, Swift thought
too much influence had been assigned to the funded debt.
He "remarked that a popular opinion in some parts of the
Union had been prevailing, that many of the Representa-
tives in Congress were under such an influence arising from
the funding system that they dared not adopt measures
necessary for the public defence, for fear the interest of the
national debt should remain unpaid. He said that a most
unreasonable and unfounded jealousy respecting the fund-
ing system existed among the people ; that he was satisfied,
during the time he had held his present office, that no
measure had been influenced by an exclusive regard to the
public debt ; that he had never owned a farthing in the
public funds." Swift believed that the proposition to
sequester the British debts should be considered as a war
measure and that such a measure should be only the last
resort of Congress after the failure of negotiations,^

Whatever may have been the view of the Federalists
in Congress, it is certain that Hamilton looked upon war
with Great Britain as a blow to public credit and calculated

» Annals of Congress (3d Cong.), p. 293, * Ibid., p. 581.

THE ECONOMICS OF THE JAY TREATY 279

to alienate the public creditors. In a letter to Washington
on the situation, he said : ''We are but just recovering from\^
the effects of a long, arduous, and exhausting war. The
people but just begin to realize the sweets of repose. We
are vulnerable both by water and land ; without either
fleet or army. We have a considerable debt in proportion
to the resources which the state of things permits the gov-
ernment to command. Measures have been recently en-
tered upon for the restoration of credit which a war could
hardly fail to disconcert, and which, if disturbed, would be
fatal to the means of prosecuting it. Our national govern-
ment is in its infancy. The habits and dispositions of our
people are ill-suited to those liberal contributions to the
treasury which a war would necessarily exact. . . . There
is a general disinclination to it in all classes. The theories
of the speculative, and the feelings of all are opposed to it." ^

In addition to the obvious economic reasons of the capital-V
istic party for maintaining peace with Great Britain and
securing a pacific settlement of disputed issues there was
another important, although somewhat more remote, eco-
nomic support for that policy. Since the close of the Revolu-
tionary war, the English by maintaining garrisons in several
strong posts had held a large portion of the western territory
of the United States, and they informed the administration
that they would not relinquish their grip until the debts \
were paid according to the terms of the treaty of 1783. By
this action the Indians were kept in a state of hostility that
checked the advance of the settlements on the frontier, thus
irritating the land speculators. At the same time the
British trappers and merchants were able to snatch away
from the Americans a rich fur trade worth about £100,000
a year, a trade that would have flowed through the eastern

1 Works (Lodge ed.), Vol. IV, p. 39.

280 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Vports if it had not been diverted to Canada.^ These were
items which the party of peace and negotiation could not

I ignore and no doubt the fur traders were willing to see
Virginians forced to pay their debts, even if it did look like
"truckling to a monarchy," for it was the price of shaking

^off the British grip in the West.

The Republicans frankly accepted the declaration that
the foreign policy of the hour turned upon economic antag-
onisms at home. In opposing the Federalist position,
Nicholas admitted the dependence of the United States on
British credit, but apparently he thought that a cause for
a new kind of Declaration of Independence. He pointed
out how, before the Revolution, British factors had granted
credit to the farmers and attached them to their stores, in
this manner precluding competition with the merchants of
other countries. "Since the Revolution, the business has
been conducted by persons in the habit of dependence on
Great Britain, and who had no other capital than the manu-
factures of that country furnished on credit. The business
is still almost wholly conducted by the same means. In no
stage of its growth then, does there appear to have been a
power in the consumer to have compared the productions
of Great Britain with those of any other country, as to their
quality or price, and therefore there is no propriety in call-
ing the course of trade the course of its choice." ^

When the mercantile interests pointed out that three-
fourths of the revenue of the United States would be seriously
affected by the drastic action against Great Britain, Giles,
the persistent Republican warrior of Virginia, begged the
opposition to "divulge the pleasing secret, when the nation
may make an exertion for the restoration of violated rights

' McLaughlin, "Western Posts and British Debts," American Historical Asso-
ciation Report, 1894, pp. 413, 428. * Annals of Congress (3d Cong.), p. 236.

THE ECONOMICS OF THE JAY TREATY 281

without alarms to revenue ! It has been emphatically re-
marked by a gentleman from New Jersey [Mr. Clark], who
has had great experience in American affairs, that this was
not the language of America at the time of the non-impor-
tation associations. This was not the language of America
at the time of the Declaration of Independence. Whence,
then, this change of American sentiment? Has America
less abihty than she then had? Is she less prepared for a
national trial than she then was ? This cannot be pretended.
There has been, it is true, one great change in her political
situation. America now has a funded debt; she had no
funded debt at those glorious epochs. May not this change
of sentiment, therefore, be looked for in her change of
situation in this respect? May it not be looked for in the
imitative sympathetic organization of our funds with the
British funds ? May it not be looked for in the indiscrimi-
nate participation of citizens and foreigners in the emoluments
of the funds ? May it not be looked for in the wishes of
some to assimilate the Government of the United States to
that of Great Britain, or at least in wishes for a more inti-
mate connexion ? If these causes exist, it is not difficult to
find the source of the national debility. It is not difficult
to see that the interests of the few who receive and disburse
the public contributions, are more respected than the inter-
ests of the great majority of the society who furnish the
contributions. It is not difficult to see that the Govern-
ment, instead of legislating for a few millions, is legislating
for a few thousands, and that the sacredness of their rights
is the great obstacle to a great national exertion." ^

In the long contest over retaliatory measures which
threatened to bring on war with Great Britain the party of

» Ihid., p. 288.

282 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

V peace, powerfully supported by Washington, prevailed. A
temporary embargo was laid, it is true, but it was short
lived. Military precautions were taken but they were re-
garded as in support of negotiations. As every one knows,
Washington sent Chief Justice Jay as an envoy extraordi-
nary to conclude with Great Britain a treaty that would
secure a redress of grievances, indemnity for American losses,
and remove the conditions which impeded the peaceful com-
mercial relations of the two countries. And as every one
knows also. Jay succeeded in negotiating a treaty which
gained several concessions favorable to the mercantile in-
terests of the North, though faUing far short of their reason-
able expectations, *and at the same time afforded no consola-
Vtion to the South at all.

It is not within the scope of this work to analyze the de-
tails of Jay's negotiations and the results, but it is pertinent
to point out the features which bear directly upon the par-
tisan contest in the country, for it may be said with safety
that the Jay treaty detached a large number of Federalists
from their old allegiance. In the first place, the trade
concessions which Jay obtained were by no means as Uberal
as the commercial interests expected and believed could be
obtained by a bolder show of firmness. Certainly Washing-
ton was far from satisfied with them and he accepted the
treaty with reluctance, only because he felt that its rejection
meant war. The owners of American shipping were espe-
cially discontented with the meagre rights obtained for them.

V If the Northern merchants had reason to be disgruntled
over the terms of the treaty, the Southern planters were

I warranted in displaying an unwonted temper. In the
first place, not a word was said about compensation for the

Vslaves that the British army had carried off.^ In the

> Professor Ogc; says that the slaveholders of the South, knowing the abolitionist
propensities of Jay, were not slow to conclude that he had willingly betrayed their

THE ECONOMICS OF THE JAY TREATY 283

second place, Article VI of the Treaty provided that debts,
contracted by citizens of the United States with British
merchants prior to the peace and whose collection was im-
peded by various lawful devices should be paid by the United
States on the basis of a determination by a joint commission.
This commission, which was to sit in London, was authorized
to take into consideration the interest as well as the principal
of such debts and its awards were to be final — the United
States binding itself to pay the awards in specie. Article XII V
put British trade in America on the most favored nation
footing, thus precluding such retaliatory and discriminatory
measures as the Repubhcans had been proposing. Finally,
the treaty was a direct slap at France and thus indirectly at
the French sympathizers in the Republican party. In
short, it was, through necessity or design or a mixture of I
both, a thoroughly partisan document, tender to Northern
commercial interests, as far as it wrung any concessions at
all from Great Britain. The very best that could be said
for its hard terms was that they prevented war and gave the
new government longer time to put the public credit and
the fiscal system on a firm foundation. ^ v

The treaty reached the United States in March, 1795, and
Washington at once called a special session of the Senate
to pass upon the results of Jay's labors. On June 24, the
treaty with the Twelfth Article suspended was approved
by the Senate, but only after the most adroit and skilful
negotiations on the part of the Federalists. When the news
of the terms of the treaty leaked out, popular and partisan
fury began to rage. Mass meetings were held to oppose the
" nefarious plot against the liberties of the people " ; Hamil-
ton was stoned while attempting to defend it ; the British

interests by trading their slavery claims for commercial privileges for New Eng-
land. "Jay's Treaty and the Slavery Interests of the United States," American
Historical Association Report, 1901, pp. 275 ff.

284 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

minister was openly insulted ; and Jay was burned in effigy
in cities, towns, and villages, amid the howls of mobs. Far
to the South good Federalists, like John Rutledge, to
whom Washington had offered the post of Chief Justice of
the Supreme Court, denounced the whole affair in the most
violent language ; and far to the North another good
Federalist, John Langdon, who had supported the adminis-
tration in all of its fiscal policies and rejoiced with the specu-
lators in the appreciation of public funds ^ execrated the
treaty as the sum of villanies and was thanked by his fellow-
citizens for his courage.

On July 22, 1795, Hamilton began that truly famous series
of papers under the pen name of "Camillus," which are to
be classed first among his masterful defences of the Federalist
administration and its policies. With that trenchant clarity,
that full knowledge of all the details of the controversy, that
stinging criticism of his adversaries, which made him so
formidable that Jefferson thought Madison the only man
capable of standin.j up under his pitiless fire, Hamilton
brought out the favorable points of the treaty, found reasons
which made the objectionable clauses seem less unpalatable,
and dissected the arguments of the opponents.

With his customary directness, he went at once to the
heart of the controversy, by showing that the opposition to
the Jay treaty was born of that conflict of economic interests
which began with the adoption of the Constitution and that
it was a part of the very same battle between capitalism and
agrarianism. The Jay treaty was not the real cause of the
trouble ; it was rather an occasion which the Republicans
had seized in order to make another assault upon the party
of public and private credit. In his first sentence he launches
into the fray. " It was to have been foreseen, that the treaty

• See Economic Interpretation, p. 120 ; and above, p. 179.

THE ECONOMICS OF THE JAY TREATY 285

which Mr. Jay was charged to negotiate with Great Britain,
whenever it should appear, would have to contend with
many perverse dispositions and some honest prejudices ;
that there was no measure in which the government could
engage, so little likely to be viewed according to its intrinsic
merits — so very likely to encounter misconception, jealousy,
and unreasonable dislike. For this, many reasons may be
assigned. It is only to know the vanity and vindictiveness of \,
human nature, to be convinced, that while this generation
lasts there will always exist among us men irreconcilable to
our present national Constitution ; embittered in their ani-
mosity in proportion to the success of its operations, and the
disappointment of their inauspicious predictions. It is a
material inference from this, that such men will watch, with I
lynx's eyes, for opportunities of discrediting the proceedings
of the government, and will display a hostile and malignant
zeal upon every occasion, where they think there are any
prepossessions of the community to favor their enterprises.
A treaty with Great Britain was too fruitful an occasion
not to call forth all their activity." ^ ^

With the economic objections advanced by Southern
interests, Hamilton was particularly severe. Writing on the
point of Great Britain's refusal to return the slaves as stipu-
lated by the Treaty of 1783, he said : "In the interpretation
of treaties, things odious and immoral are not to be presumed.
The abandonment of negroes, who had been induced to quit
their masters on the faith of official proclamation, promising
them liberty, to fall again under the yoke of their masters,
and into slavery, is as odious and immoral a thing as can be
conceived. It is odious, not only as it imposes an act of
perfidy on one of the contracting parties, but as it tends to
bring back to servitude men once made free. The general

1 Works (Lodge ed.), Vol. IV, pp. 371 ff.

286 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

interests of humanity conspire with the obKgation which
Great Britain had contracted towards the negroes, to repel

y^this construction of the treaty [1783], if another can be found.
... It has been shown, as I trust, to the conviction of dis-
passionate men, that the claim of compensation for the
negroes is, in point of right, a very doubtful one ; in point of

^ interest, it certainly falls under the description of partial
and inconsiderable ; affecting in no respect the honor or
security of the nation, and incapable of having a sensible

Vnfluence upon its prosperity." ^

That opposition which was based on the clause of the
treaty providing compensation for uncollectible debts due
British merchants, Hamilton met in the following language :
"To a man who has a due sense of the sacred obligation of
a just debt, a proper conception of the pernicious influence
of laws which infringe the rights of creditors, upon morals,
upon the general security of property, upon public as well as
private credit, upon the spirit and principles of good govern-
ment ; who has an adequate idea of the sanctity of the
national faith, explicitly pledged — of the ignominy attend-
ant upon a violation of it in so delicate a particular as that
of private pecuniary contracts — of the evil tendency of a
precedent of this kind tb the political and commercial
interests of the nation generally — every law which has
existed in this country, interfering with the recovery of the
debts in question, must have afforded matter of serious re-
gret and real affliction. To such a man, it must be among
the most welcome features of the present treaty, that it
stipulates reparation for the injuries which laws of that
description may have occasioned to individuals, and that,
as far as is now practicable, it wipes away from the national
reputation the stain which they have cast upon it. He will

> Worhg, (Lodge ed.), Vol IV. pp. 398, 419.

THE ECONOMICS OF THE JAY TREATY 287

regard it as a precious tribute to justice, and as a valuable
pledge for the more strict future observance of our public
engagements ; and he would deplore as an ill-omened symp-
tom qf the depravation of public opinion, the success of the
attempts which are making to render the article unacceptable
to the people of the United States. But of this there can
be no danger. . . . Let those men who have manifested
by their actions a willing disregard of their own obligations
as debtors — those who secretly hoard, or openly or un-
blushingly riot on the spoils of plundered creditors, let such
men enjoy the exclusive and undivided satisfaction of
arraigning and condemning an act of national justice, in
which they may read the severest reproach of their iniqui-
tous principles and guilty acquisitions. But let not the
people of America tarnish their honor by participating in
that condemnation, or by shielding with their favorable
opinion, the meretricious apologies which are offered for
the measures that produce the necessity of reparation." ^

After disposing of the Southern objections to the treaty
which were based on the clear provision for the payment
of private debts and the failure to settle the question of the
confiscated slaves, Hamilton showed in great detail why all
the capitalistic interests should rally to the support of the
government in the execution of the agreement with Great
Britain. In the first place commercial interests would V
suffer grievously if a war should break out. "Their want of '
a marine in particular to protect their commerce would
render war in an extreme degree a calamity." The country .
would be thrown back into the condition existing under the
Articles of Confederation. "Our trade, navigation, and
mercantile capital would be essentially destroyed." As a
result "every branch of industry would suffer." This ap-

» Ibid., Vol. V, pp. 3, 4.

288 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

peal went directly home to that large and influential group
which only a few years before had ralhed to the support
of the movement to overthrow the Articles and substitute
the Constitution. A second appeal went to those interested
in western land speculation and the fur trade : " Spain being
an officiate with Great Britain, a general Indian war might
be expected to desolate the whole exterior of our frontier."
The third appeal went to those concerned in the state of the
national funds: "Our pubhc debt instead of a gradual
diminution would sustain a great augmentation and draw
with it a large increase of taxes and burthens on the people."
It was obvious to all what that meant : for almost every
taxable source that could be touched with safety was already
reached, and an increase in the debt would bring a serious
reduction in the value of stocks. Finally Hamilton warned
the agrarians that even "agriculture would of course lan-
guish," as business in general was reduced in volume.

Having finished with the economic issues, Hamilton, with
great penetration, divined the growing fear of the conserva-
tive propertied classes as the French revolution advanced.
Shays' rebelhon was hardly a decade off. The direct and
obvious economic evils, however great, "were perhaps not
the worst to be apprehended. It was to be feared that the
war would be conducted in a spirit which would render it
more than ordinarily calamitous. There are too many
proofs that a considerable party among us is deeply infected
with those horrid principles of Jacobinism which, proceeding
from one excess to another, have made France a theatre
of blood. ... It was too probable [when the Jay negotia-
tions were begun] that the direction of the war, if com-
menced, would have fallen into the hands of men of this
description. The consequences of this, even in imagination,
are such as to make any virtuous man shudder." It is

THE ECONOMICS OF THE JAY TREATY 289

small wonder that merchants and shippers who were at first
inclined to revolt against the Jay treaty began to swing
around to the support of the administration, when Hamilton
thus made it clear that war not only meant a destruction
of capitalistic enterprises and interests, but a possible social
war at home which would make Shays' rebellion appear
trivial in comparison.

On July 22, 1795, the very day that Hamilton began his
powerful papers in support of the treaty, the New York
chamber of commerce passed resolutions indorsing its terms.
Among these resolutions was a declaration to the effect
that "if the treaty should fail to be ratified, we should appre-
hend a state of things which might lead to hostilities ; in
which event our navigation (now dispersed in all quarters of
the globe) may be intercepted, our underwriters injured,
our commerce abridged, our produce reduced to little value,
our artisans, mechanics, and laborers deprived of employ-
ment, our revenue diminished, and the lives of our fellow
citizens sacrificed." ^

A small minority of the chamber of commerce voted
against the resolutions of indorsement and shortly after-
ward addressed a letter to Washington protesting that the
majority of those members of the chamber who approved
the treaty "were either inimical to this country in the late
war or have emigrated to America since that period."
The protestants went on to give particulars, saying that of
the fifty-nine who had voted in the affirmative, only eighteen
had resided out of the British lines during the late war,
eight were refugees, i.e., had joined the British, seventeen
resided within the British lines during the whole war, six
emigrated to this country from Great Britain during the
war and resided in towns held by the British, and ten had

» The Aurora, July 28, 1795.
U

290 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

emigrated to America since the peace. That these allega-
tions are well founded would appear from the fact that the
persons concerned were mentioned by name.^

In the private correspondence of the time also, we catch
some of the flavor of the old partisan controversy. George
Cabot, in letters to Oliver Wolcott, wrote that the chamber
of commerce of Boston was unanimous in favor of the treaty,
that at Salem "the respectable people are all acquiescent
and many of them approve," that at Newburyport " the
principal merchants were well satisfied," and that "on the
whole it may be safely pronounced that the sober and dis-
creet part of even our seaports and still more of our country
towns feel a great anxiety lest the treaty should by any means
miscarry." ^ A few days later, on August 14, 1795, Cabot
wrote to King : " Since my last, I have been at Newburyport,
where the merchants are perfectly well united, and have by
this time probably made a formal declaration of their
opinions. . . . The Boston Chamber of Commerce have
held a meeting. The number attending was, as usual,
about forty. They were of the most reputable class, and
with only a single dissentient approbated the treaty, and rep-
robated the attempts everywhere made to excite dis-
content and tumult among the people. . . . The members
of the Chamber of Commerce who did not attend are to be
invited to concur in writing ; and it is expected that three-
fourths, including nineteen-twentieths of the real respecta-
bility, will concur." ^

It may be safely asserted that in general the support for
the treaty came from the same sources as the earher support
for the ratification of the Constitution. Chambers of com-
merce indorsed it, meetings of merchants and business

> The Aurora, August 10, 1795.

> Lodge, Life and Letters of George Cabot, p. 84. * Op. cit., p. 85.

THE ECONOMICS OF THE JAY TREATY 291

men in the seaboard towns approved it, and petitions from
men prominent in commercial and financial operations were
laid before Congress praying for its ratification. Speaking
of the Philadelphia contingent which came to the support of
the treaty, the Aurora declared : ^ "In looking over the list
of subscribers to that address [of Philadelphians who
favored the treaty] the names of many may be distinguished
who are opposed to the treaty ; but who have been seduced
by the influence of certain bank directors who were most
active on the occasion. The earnestness and persuasion
which the bank directors used to obtain signatures is truly
extraordinary. They seemed to make an appeal to the in-
terests of those whose signatures they have solicited, not
as related to the treaty, but as connected with the banks. , . .
Were we to say that bank directors, stock-holders and stock-
jobbers are more interested in the treaty than other citizens,
it would be a truth ; but a truth of that sort, which ought to
make the President spurn their opinions."

That the capitalist interests generally were upholding
the hands of the administration in the negotiation of the
treaty was also the conclusion which Madison reached and
communicated in a letter to Monroe, dated at Philadelphia,
December 20, 1795 : "As soon as it was known that the Pres.
had yielded his ratification the Br. party were reinforced by
those who bowed to the name of constituted authority,
and those who are implicitly devoted to the Pres. Principal
merchants of Phila., with others amounting to about 400,
took the lead in an address of approbation. There is good
reason to believe that many subscriptions were obtained by
the Banks, whose directors solicited them, and by the in-
fluence of Br. capitalists. In Bait., Charleston, and other
commercial towns, except Phila., New York, and Boston^

1 The Aurora, August 27, 1795.

292 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

no similar proceeding has been attainable. Acquiescence
has been inculcated with the more success by exaggerated
pictures of the public prosperity, an appeal to the popular
feeUng for the Pres., and the bugbear of war ; still however,
there is Httle doubt that the real sentiment of the mass
of the community is hostile to the Treaty." ^

From the agrarians came plaintive criticisms of the treaty,
based on the assumption that it was a victory for the capi-
taUstic interests. Even before Jay's mission, while the
proposed negotiations were under advisement, "A Farmer of
the Back Settlements" wrote to the General Advertiser at
Philadelphia that the whole conduct of the federal adminis-
tration was Httle more than an attempt to copy the British
model and that closer treaty relations merely meant the
triumph of the British party in the United States. In a

Vletter of January 2, 1794, the writer complained that our
agents abroad and at home had been influenced by a pro-
pensity to aristocracy and by a bias for British interests
and that Hamilton was a faithful copyist of the British
ministry "who by his inverted pohtics has continued to
create a monied aristocracy, give individuals an opportunity

^ of accumulating immense fortunes, which it would have been
more expedient and more conformable to repubhcan prin-
ciples to have divided among the many, who has formed our
system of finance on the odious model of that of England,

V/with loans, banks, excises."

V Opponents of the treaty were never tired of asserting that
the attempts at an accommodation between the United States

I and Great Britain proceeded from the desire of the financial
and commercial interests to form profitable connections
with identical interests in England and that this meant

Ncoming to terms with the very Tories against whom the

> Writings of Madison (Hunt ed.). Vol. VI, p. 259.

THE ECONOMICS OF THE JAY TREATY 293

"embattled farmers" had fought in the war of the Revolu-
tion. For example, "Cato," in the General Advertiser of
Philadelphia, so represented the affair in letters written
early in 1794:^ "The same timid language, which dis-
tinguished a party prior to the late revolution is again heard,
and is doubtless thought the real language of America
by the Minister of Britain, who only judges by the at-
mosphere of cities tainted with the breath of tories and
foreign emissaries, without having the least knowledge of the
pure and elastic air which dilates the lungs of the American
yeomanry — Our cities are unfortified — Our funds will
be shaken — The Indians are upon our backs &c. &c. &c. — •
As if the experience of the last war, an established govern-
ment, and the duplication of our numbers had enfeebled us,
and rendered us less capable than we were in 1776 of resisting
a nation evidently fallen from her former greatness."

"Peace, commerce with Britain, and the lenity of the
states. . .," he continued, "give an influence to two classes
of people, whose voices were not heard in the hour of danger,
British merchants and American loyalists. They possessed
wealth and resources which were unknown to the war-worn
soldiers and the impoverished patriot. These had seen
their fortunes exhausted by the length of the war, and years
which are usually employed in acquiring the means of sup-
porting a family [had been] devoted to securing the freedom
of their country.

"Artful politicians among us saw that power would follow V
property, and that this new phalanx, [British merchants
and loyaHsts] disciphned to habits of submission, and
attached to the monarchy, would afford the firmest sup- I
port to those who secured their confidence, and gave them
reason to hope for establishments, in which wealth rather

1 The General Advertiser, January 8 and February 6, 1794.

294 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

than public virtue, should be the test of merit. They were
invited to come from their lurking places ; to assume a
loftier tone ; to declare their contempt of the populace ;
to share in the honors of our own government, while they
possessed their veneration for that which w^e had shaken off.
As these people and their patrons gave the tone in polite
societies, it is not to be wondered that the British govern-
\ ment should be admired, that its measures, however unjust
and violent with respect to us, should be palliated, . . . and
above all a hatred of the French nation inculcated. . . .
The reasoning of those who could give good dinners was
^irresistible, and it was generally adopted in our capitals."

After the fashion of the day, the Republicans attempted
some crude satire at the expense of the champions of the
treaty by setting forth their principles in the form of a set
of mock resolutions. For example, ''Alexander Pacificus"
is supposed to have reported the following declaration of
faith at an imaginary convention held while the British con-
troversy was going on during the winter of 1794:^ "At a
meeting of the paper noblemen of the U. S. and the emissaries
of the British Gov't, to take into consideration the resolves
of the Democratic Society, irredeemable public debt in the
Chair, the following resolutions were unanimously adopted :

''That it is the unalienable right of stock-holders, stock-
jobbers, bank-directors, and speculators to discuss with
freedom, all subjects of public concern, and, that as no other
person or persons are seized of this right, as they [the stock-
holders &c.] alone have the genuine interest of the public
debt at heart, it being the paramount interest of America,
to which all other interests ought to submit.

"That the high professions of disinterested patriotism
held out by those persons who are not within the vortex of

» The General Advertiser, February 12, 1794.

THE ECONOMICS OF THE JAY TREATY 295

the funding system, are very equivocal proofs of their pubhc
virtue." . . .

[That to keep our engagements with France is] "a breach
of the funding interest."

"That the determination expressed by the Democratic
Society to abide by our national engagements and preserve
our national friendships is a flagrant instance of incon-
sistency ; for ' Pacificus ' asserts that interest and not honor
or gratitude ought to be the bond of nations, and he is our
Bible. . . .

"That the trade of America has been the means of pros-
trating her at the feet of some of the tyrants of Europe, and
that this trade having been greater with Great Britain and
her colonies than with all the rest of Europe, its interruption
at this time would overwhelm the British and the treasury
influence here in unspeakable distress. . . .

"That the despotism of the people is as tremendous an
evil as that of a Monarch, for the people always tyrannize
over themselves ; and that to encourage this despotism, is
to incur the execration of mankind."

It is impossible for any one who runs through the debates
in Congress, the public papers of the statesmen of the
period, the newspapers, the pamphlets, and the private
correspondence to escape the conclusion that the Jay treaty V
originated in the economic interests of the Federalist party
and that the maintenance of the stability of the fiscal system
through the continued regularity of the revenues was among
the first considerations that appealed to them. Rather than
risk war, they were ready to accept terms which were highly '"
unsatisfactory to many commercial and shipping interests and
thus alienate some of the support which they had received
from those groups. When the latter began their furious
protests against the treaty, the Federalist leaders had little

296 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

difficulty in showing them the very subtle connections which
united all the fiscal, capitalist, commercial, and shipping
groups — credit and fluid capital. Nevertheless, a great
number of FederaUsts of the trading centres evidently did
not return to their old allegiance after the agitation sub-
_ sided. Moreover, the Republicans were recruited by hun-
dreds of Southern planters who were disgruntled over the
terms of the treaty, the settlement of the private debts due
British creditors, and the failure to take up the question
of the stolen slaves.

By no means one of the least significant results of the con-
test over the Jay treaty was the temporary depreciation of
Washington's influence with the nation at large. Hitherto,
pamphleteers and writers of partisan screeds had almost
altogether uniformly spoken of him in terms of the highest
respect, as a person above all ordinary party considerations.
After the storm over the treaty arose, he was commonly
referred to as a tool of the Federalist party, doing its work
under the guise of his splendid patriotism. This new spirit
of unlimited abuse was expressed forcibly in the Republican
organ, Aurora, on March 4, 1797, when Washington gladly
laid down the heavy burdens of his office: "If there ever
was a period for rejoicing, this is the moment — every heart
in unison with the freedom and happiness of the people,
ought to beat high with exultation that the name of Wash-
ington from this day ceases to give a currency to political
iniquity, and to legalize corruption. A new sera is now open-
ing upon us, an aera which promises much to the people ;
for public measures must now stand on their own merits."

Note to Chapter X

A convention for the payment of the British debts as provided by the Jay treaty

was negotiated during Jefferson's administration and thus by a sort of poetic jus-

* tice the Virginia debts were shifted to the nation under the administration of a

THE ECONOMICS OF THE JAY TREATY 297

Virginia President. Oliver Wolcott, the former Federalist Secretary of the Treas-
ury, attacked Jefferson's policy in a savage pamphlet from which the following
extracts are taken : "To those who are incapable of discovering the secret motives
which govern Mr. Jefferson and his associates of the Virginia party, it has appeared
surprising that the convention negotiated by Mr. King, in pursuance of instruc-
tions from the federal administration should have attracted so little attention.
By this convention, the sum of £600,000 sterling or nearly three million dollars is
payable at the treasury of the United States, for losses sustained by British sub-
jects, in consequence of the non-execution of the 4th article of the Treaty of
Peace. . . .

"The payment of so considerable a sum as three millions of dollars, for any pur-
pose whatever except for the reduction of the funded debt, or the purchase of
new lands, for the purpose of extending the ' blessings of freedom,' must appear to
be a strange departure from the economical maxims of the present administration.
But that such a sum should be paid to British subjects, for losses in the recovery of
private debts; that a convention should be made in support of the 4th article of
the Treaty of Peace, which for twenty years had been the cause of the most ve-
hement controversies ; that it should contain an express recognition of a stipula-
tion in Mr. Jay's Treaty which had been repeatedly recognized as a degrading sur-
render of the judicial honor of this country ; that the obligation should be ratified
by democratic Senators, though formed by Mr. King, a gentleman highly es-
teemed and revered by the federal party ; these are indeed most astonishing
phenomena. They are, however, susceptible of explanation ; and when this paper
is perused with attention, it is believed that all candid men will concur with the
poet, that,

" ' The clue once given, unravels all the rest.
The prospect cleared, Virginia stands confest.'
It is a firmly established opinion of men well versed in the history of our revolu-
tion, that the whiggism of Virginia was chiefly owing to the debts of the planters.
It is certain that their creditors were among the first objects of a severe and impolitic
hostility, which occasioned great dissatisfaction among reflecting men in this coun-
try and deeply injured the popularity of the American cause in Great Britain. It
is also certain that measures of a very extraordinary nature were adopted during
the War, for the purpose of extinguishing the debts of individuals ; and that the
4th article of the Treaty of Peace, which stipulated that there should be no lawful
impediments to the recovery of the full value of all bona fide debts was received
with the utmost disgust in Virginia."

Wolcott now cites the acts of the Virginia assembly designed to frustrate the
enforcement of the provision of the treaty of 1783 relative to debts, and calls atten-
tion to the fact that while the adoption of the Constitution was under debate in the
Virginia convention efforts were made to secure an amendment to the judiciary
section which would deprive the federal courts of jurisdiction over suits between
citizens and foreign states, citizens, and subjects. "It has been asserted," Wolcott
then continues, "that the opposition of Virginia to the National Constitution,
and particularly to the powers vested in the judicial department, originated in sinis-
ter and local interests." In support of this allegation reference is now made to the
papers of the Commissioners appointed in pursuance of the 6th article of the treaty
of 1794, by which it will appear that " the claims exhibited against the United States
exceeded eighteen millions of dollars. It will not be pretended that these claims are
of themselves evidence of just demands ; though on the contrary it is deemed fair
to infer that the proceedings of those states were just and equitable where the

298 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

claims were comparatively inconsiderable, in proportion to their relative commerce
with Great Britain.

Sterling
The claims exhibited against the New England states amounted to . £ 23,000

The states of New York and New Jersey 180,000

The states of Pennsylvania and Delaware 15,000

The whole amount of the claims against the states north of Maryland

amounted therefore to no more than 218,000

While those against the five southern states amounted to ... . 3,869,000
of which 8,500,000 dollars or one half of the whole amount was claimed of the
single state of Virginia.

"An analysis of the individual claims would exhibit the disproportion in a more
striking point of view, and more fully explain the real motives of the Virginia party.
Such an investigation would show that the claims upon Virgi7iia were for debts
due to commercial houses, while those against the states north of Maryland were
almost exclusively on behalf of American loyalists who were not entitled to com-
pensation under the Treaty. . . . According to the best estimate which can now
be formed, four-fifths of the sum payable in pursuance of the convention negotiated
by Mr. King will be awarded to the creditors of Virginians." British Influence on
the Affairs of the United States Proved and Explained, Boston, 1804. Anonymous
[by Oliver Wolcott]. Duane Collection of Pamphlets (Library of Congress),
Vol. 89, No. 6.

CHAPTER XI

THE POLITICAL ECONOMY OF JOHN ADAMS ^

During the election of Washington's successor it became
apparent that the country was sharply divided and that the
dissatisfaction with Federalist policies was deep and fervent.
It is true, a sturdy Federalist, John Adams, carried the day,
but his victory over Jefferson was won by a margin of three
electoral votes — a fact which stung him like a nettle.
Moreover, he knew that many who voted for him, including
no less an important person than Hamilton, had accepted
his candidature with reluctance as a lesser evil. Yet, un-
propitious as were the signs, the election of 1796 was a victory
for the party that had framed the Constitution and carried
it into effect.

Whatever may have been the objections brought against
Adams on personal grounds, it could not be said that his
system of politics was unknown to those who had occasion
to vote for presidential electors in the autumn of 1796. On
the contrary, Adams, unlike Jefferson and Washington, had
published a large work in which he had elaborated with
great pains and with copious details his theories of govern-
m.ent, politics, economics, and democracy : A Defence of the
Constitutions of Government of the United States of America
against the attack of M. Turgot in His Letter to Dr. Price, first

1 See A. D. Morse, "The Politics of John Adams," American Historical Review,
Vol. IV, p. 292. A classified list of materials on Adams' politics is given in a note
on p. 302 of the same. C. M. Walsh, The Political Science of John Adams. (This
valuable work appeared after this chapter was written.)

299

300 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

issued in 1786.^ This work, although too laborious and too
prolix for popular interest, was nevertheless widely read
and still more widely commented upon in American news-
papers. Large sections, particularly those considered in
this chapter, had been reprinted in full in several papers and
had been the subject of friendly and adverse criticism by
those interested in politics. It was an unlettered voter
who was not able to discover in 1796 John Adams' system of
political economy.

For the purposes of American politics, the most important
part of Adams' long treatise is the Sixth Letter, entitled,
''The Right Constitution of a Commonwealth Examined,"
in which he subjects to searching scrutiny Marchamont
Nedham's The Excellency of a Free State or the Right Con-
stitution of a Commonwealth, published in the middle of the
seventeenth century. Adams built his entire system upon
an economic foundation, upon the material needs of human
nature. In fact, he bluntly declared : " That the first want
of every man is his dinner and the second want his girl were
truths well known to every democrat and aristocrat, long
before the great philosopher Malthus arose to think he
enlightened the world by his discovery." ^ Out of these
elemental passions to preserve and continue the species
sprang the struggle for economic goods. "Indolence," he
says, "is the natural character of man, to such a degree,
that nothing but the necessities of hunger, thirst, and other
wants equally pressing, can stimulate him to action, until
education is introduced in civilized societies, and the strong-
est motives of ambition to excel in arts, trades, and pro-
fessions, are established in the minds of all men : until this
emulation is introduced, the lazy savage holds property in

' Volume III of the London edition of 1794 is used here.

* John Adams, Life and Works, Vol. VI, p. 516. Unless otherwise stated, quo-
tations are from the Sixth Letter above cited.

THE POLITICAL ECONOMY OF JOHN ADAMS 301

too little estimation to give himself trouble for the preser-
vation or acquisition of it."

In spite of the powerful incentives of hunger and thirst
and "other wants equally pressing," natural indolence
and other causes prevent a large majority of the people
from acquiring any property. "There is in every nation
and people under heaven a large proportion of persons who
take no rational and prudent p;recautions to preserve what
they have, much less to acquire more." Hence there ensues
a division of every society into two broad groups : a prop-
ertied class and a propertyless class. "Suppose," says
Adams, "a nation, rich and poor, high and low, ten millions
in numbers, all assembled together ; not more than one or
two millions will have lands, houses, or any personal prop-
erty : if we take into account the women and children, or
even if we leave them out of the question, a great majority
of every nation is wholly destitute of property, except a
small quantity of clothes, and a few trifles of other move-
ables."

The broad division of society into "gentlemen" and
"common people" which apparently rests upon cultural dis-
tinctions is, in fact, only the outward sign of the economic
division into rich and poor. "The people, in all nations,"
remarks Adams, "are naturally divided into two sorts, the
gentlemen and the simplemen, a word which is here chosen
to signify the common people. By gentlemen are not meant
the rich or the poor, the high or the low born, the industrious
or the idle, but all those who have received a liberal educa-
tion, an ordinary degree of erudition in liberal arts and
sciences, whether by birth they be descended from magis-
trates and officers of government, or from husbandmen,
merchants, mechanics, or laborers ; or whether they be
rich or poor." While thus making the distinction between

302 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

gentlemen and common people rest upon cultural differences,
Adams is quick to add that "generally those who are rich
and descended from families in public hfe will have the best
education in arts and sciences, and therefore the gentlemen
will ordinarily, notwithstanding some exceptions to the rule,
be the richer, and born of more noted famihes. By the
common people we mean laborers, husbandmen, mechanics,
and merchants in general, who pursue their occupations
and industry without any knowledge in liberal arts or
sciences, or in anything but their own trades and pursuits ;
though there may be exceptions to this rule, and individuals
may be found in each of these classes who may really be
gentlemen."

The economic divisions in society not only manifest them-
selves in social classes ; they form the basis of those " canons
of Reputability, " such as emulation in conspicuous con-
sumption, which are the outward and visible signs of social
superiority. "Consideration," says Adams, "is attainable
by appearance and ever will be ; and it may be depended on
that rich men in general will not suffer others to be consid-
ered more than themselves, or as much, if they can prevent
it by their riches. The poor and the middle ranks, then,
have it in their power to diminish luxury as much as the great
and rich have. . . . The higher ranks will never exceed
their inferiors but in a certain proportion ; but the distinction
they are absolutely obHged to keep up or fall into contempt
and ridicule. It may gratify vulgar mahgnity and popular
envy, to declaim eternally against the rich and the great,
the noble and the high ; but generally and philosophically
speaking, the manners and character of a nation are all
alike ; the lowest and the middling people, in general, grow
vicious, vain, and luxurious, exactly in proportion. As to
appearance, the higher sort are obHged to raise theirs in

THE POLITICAL ECONOMY OF JOHN ADAMS 303

proportion as the stories below ascend. A free people are
the most addicted to luxury of any ; that equality which they
enjoy and in which they glory, inspires them with sentiments
which hurry them into luxury. A citizen perceives his fellow
citizen, whom he holds his equal, have a better coat or hat,
a better house or horse, than himself, and sees his neighbors
are struck with it, talk of it, and respect him for it : he
cannot bear it ; he must and will be upon a level with him."

Thus, according to Adams, the whole system of modern
culture rests upon economic foundations laid in the impera-
tive necessities of human nature. Cultural badges are but
the outward signs of economic distinctions. The gentleman
and the boor are pretty much of the same clay, but the
possession of worldly goods divides them. A considerable
number of persons may pass from the lower to the upper
class or drop from the upper to the bottom stratum, but the
social categories, the class divisions, remain. Private prop-
erty is their basis.

These economic divisions, which produce social classes
and cultural distinctions, are likewise the basis of politics —
the conflict of parties, "In every society where property
exists," says Adams, "there will ever be a struggle between
rich and poor." The rich will employ all of the arts and
chicane of civilization to augment their possessions, and un-
less they are checked a battle will go on until nearly all prop-
erty is concentrated in the hands of the few and the masses
sink into poverty: "The gentlemen are more intelligent
and skilful, as well as generally richer and better connected,
and therefore have more influence and power than an equal
number of common people : there is a constant effort and
energy in the minds of the former to increase the advantages
they possess over the latter, and to augment their wealth
and influence at their expense. This effort produces re-

304 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

sentments and jealousies, contempt, hatred, and fear be-
tween the one sort and the other. Individuals among the
common people endeavour to make friends, patrons, and
protectors among the gentlemen. This produces parties,
divisions, tumults and war : but as the former have most
address and capacity, they gain more and more continually,
until they become exorbitantly rich and the others miserably
poor."

While the rich organize to despoil the poor, the latter
unite to protect themselves and this class contest usually
ends in monarchy. In the progress of great riches accom-
panied by great poverty, says Adams, "the common people
are continually looking up for a protector among the gentle-
men, and he who is most able and wiUing to protect them
acquires their confidence. They unite together by their
feehngs, more than their reflections, in augmenting his
power, because the more power he has and the less the gentle-
men have, the safer they are. This is a short sketch of the
history of that progress of passions and feeling which has
produced every simple monarchy in the world ; and if
nature and its feehngs have their course without reflection,
they will produce a simple monarchy forever."

But it must not be thought that the conflict has but one
side. The poor are equally anxious to despoil the rich.
" Perhaps, at first, prejudice, habit, shame, or fear, principle
or religion would restrain the poor from attacking the rich,
and the idle from usurping on the industrious." But to
rely on these as the real safeguards of property would be to
rely on broken reeds. "The time would not be long before
courage and enterprise would come, and pretexts be invented
by degrees, to countenance the majority in dividing all
the property among them, or at least in sharing it equally
with its present possessors. Debts would be abohshed first ;

THE POLITICAL ECONOMY OF JOHN ADAMS 305

taxes laid heavy on the rich, and not at all on the others ;
and at last a downright equal division of everything be de-
manded and voted. What would be the consequence of
this? The idle, the vicious, the intemperate would rush
into the utmost extravagance of debauchery, sell and
spend all their share, and then demand a new division of
those who purchased from them. The moment the idea is
admitted into society, that property is not as sacred as the
laws of God and that there is not a force of law and pubUc
justice to protect it, anarchy and tyranny commence."

We may confidently appeal to history for proof of the fact
that the majority will attack the property rights of the
minority if given the opportunity. It is all very well to
flatter the democratical portion of society by saying that
they are not as the monarchical and the aristocratical,
"but flattery is as base an artifice and as pernicious a vice
when offered to the people as when given to others. There
is no reason to believe the one much honester or wiser than
the other ; they are all of the same clay, their minds and
bodies are alike. The two latter have more knowledge and
sagacity, derived from education, and more advantages for
acquiring wisdom and virtue. As to usurping others'
rights, they are all three equally guilty when unlimited in
power : no wise man will trust either with an opportunity ;
and every judicious legislator will set all three to watch
and control each other. We may appeal to every page of
history we have hitherto turned over, for proofs irrefragable
that the people, when they have been unchecked, have been
as unjust, tyrannical, brutal, barbarous, and cruel as any
king or senate possessed of uncontrollable power : the
majority has eternally, and without one exception, usurped
over the rights of the minority."

While placing a high value on moral sentiments, Adams

306 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

is unwilling to rely upon them as a real check upon this
sway of private interests. "Moral and Christian, and
political, virtue cannot be too much beloved, practised, or
rewarded ; but to place liberty on that foundation only
would not be safe : but it may be well questioned whether
love of the body pohtic is, precisely, moral or Christian
virtue, which requires justice and benevolence to enemies
as well as friends, and to other nations as well as our own.
It is not true, in fact, that any people ever existed who
loved the public better than themselves, their private friends,
neighbours, &c. and therefore this kind of virtue, this sort
of love, is as precarious a foundation for liberty as honour or
fear." This is a fact which we cannot ignore. " If we should
extend our candor so far as to own that the majority of men
are under the dominion of benevolent and good intentions,
yet it must be confessed that a vast majority frequently
transgress."

This inevitable battle of rich and poor in pohtics is, by
the force of circumstances, all the more bitter in a democ-
racy than in a simple monarchy where the status of the
classes is fairly well estabHshed and there is less economic
and ''cultural" rivalry. In a democracy where the badges
of class distinction are not so firmly fixed, the lust for the
object of riches knows no bounds: "In proportion as a
government is democratical, in a degree beyond a propor-
tional prevalence of monarchy and aristocracy, the wealth,
means, and opportunities being the same, does luxury
prevail. Its progress is instantaneous. There can be no
subordination. One citizen cannot bear that another
should live better than himself; a universal emulation in
luxury instantly commences."

If the poHtical system in which this war of the classes is
carried on permits simple majority rule, the laws will in-

THE POLITICAL ECONOMY OF JOHN ADAMS 307

evitably bear the stamp of the class interest which dictates
them. "In every society where property exists, there will
ever be a struggle between rich and poor. Mixed in one
assembly, equal laws can never be expected : they will either
be made by numbers, to plunder the few who are rich, or by
influence, to fleece the many who are poor. Both rich and
poor, then, must be made independent, that equal justice
may be done, and equal liberty enjoyed by all. To expect
that in a single sovereign assembly no load shall be laid
upon any but what is common to all, nor to gratify the
passions of any, but only to supply the necessities of their
country, is altogether chimerical."

To suppose that frequent elections, rotation in office,
single-chambered assemblies, and democratic devices gener-
ally will check the propensities of the majority to devour the
rights of the minority is to fly in the face of all human ex-
perience. The pages of Roman history are replete with
examples which warn us against indulging in any such fond
hopes. "Each scene of election [in England or the United
States] will have two or more candidates, and two or more
parties, each of which will study its sleights and projects,
disguise its designs, draw tools, and worm out enemies.
We must remember that every party, and every individual,
is now struggling for a share in the executive and judicial
power as well as legislative, for a share in the distribution
of all honors, offices, rewards, and profits. Every passion
and prejudice of every voter will be applied to, every flattery
and menace, every trick and bribe that can be bestowed and
will be accepted will be used. . . . When vice, folly, and
impudence and knavery have carried an election one year,
they will acquire, in the course of it, fresh influence and power
to succeed the next. In the course of the year, the delegate
in an assembly that disposes of all commissions, contracts,

308 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

and pensions has many opportunities to reward his friends
among his own constituents and to punish his enemies."

Far from placing a check on avarice and self-interest — the
two predominating motives in the human breast — the sin-
gle democratic assembly annually elected is the best cal-
culated to facilitate the gratification of self-love and the
pursuit of the private interest by a few individuals. ''A few
eminent conspicuous characters will be continued in their
seats in the sovereign assembly, from one election to another,
whatever changes are made in the seats around them ; by
superior art, address, and opulence, by more splendid birth,
reputation, and connection, they will be able to intrigue
with the people and their leaders out of doors until they
worm out most of their opposers, and introduce their friends :
to this end they will bestow all office, contracts, privileges
in commerce, and other emoluments, and throw every vex-
ation and disappointment in the way of the former until
they establish such a system of hopes and fear throughout
the state as shall enable them to carry a majority in every
fresh election of the house."

The political system thus built up by "the cohesive power
of public plunder" will dominate all society. "No favors
will be attainable but by those who court the ruhng dema-
gogues in the house, by voting for their friends and in-
struments ; and pensions and pecuniary rewards and gratifi-
cations, as well as honors and offices of every kind, will be
voted to friends and partisans. The leading minds and
most influential characters among the clergy will be courted,
and the views of the youth in this department will be turned
upon those men, and the road to promotion and employment
in the church will be obstructed against such as will not
worship the general idol. Capital characters among the
physicians will not be forgotten, and the means of acquiring

THE POLITICAL ECONOMY OF JOHN ADAMS 309

reputation and practice in the healing art will be to get the
state trumpeters on the side of youth. The bar too will be
made so subservient that a young gentleman will have no
chance to obtain a character or clients, but by falling in
with the views of the judges and their creators. Even the
theatres, and actors and actresses, must become politicians
and convert the public pleasure into engines of popularity
for the governing members of the house. The press, that
great barrier and bulwark of the rights of mankind when it
is protected in its freedom by law, can now no longer be free :
if the authors, writers, and printers will not accept of the
hire that will be offered them, they must submit to the ruin
that will be denounced against them. The presses with
much secrecy and concealment will be made the vehicles
of calumny against the minority and of panegyric and
empirical applauses of the leaders of the majority; and no
remedy can possibly be maintained. In a word, the whole
system of affairs and every conceivable motive or hope and
fear will be employed to promote the private interest of a
few and their obsequious majority ; and there is no remedy
but in arms."

Inasmuch as simple, popular sovereignty leads at once to
demagogy and the spoliation of the rich, "to give the people,
uncontrolled, all the prerogatives and rights of supremacy,
meaning the whole executive and judicial power, or even the
whole undivided legislative, is not the way to preserve
liberty. In such a government it is often as great a crime
to oppose or decry a popular demagogue, or any of his prin-
cipal friends, as in a simple monarchy to oppose a king, or
in a simple aristocracy, the senators : the people will not
bear a contemptuous look or disrespectful word ; nay, if
the style of your homage, flattery, and adoration is not as
hyperbolical as the popular enthusiasm dictates, it is con-

310 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

strued into disaffection; the popular cry of envy, jealousy,
suspicious temper, vanity, arrogance, pride, ambition,
impatience of a superior, is set up against a man, and the
rage and fury of an ungoverned rabble, stimulated under-
hand by the demagogic despots, breaks out into every kind
of insult, obliquy, and outrage."

Under the circumstances, those who are called upon to
form the constitution of a commonwealth must take into
account the divisions of society which are engendered by
the unequal distribution of property and must provide ample
safeguards for the rights of those who have acquired prop-
erty as well as the rights of the propertyless. "It must be
remembered, that the rich are people as well as the poor ;
that they have rights as well as others ; that they have as
clear and as sacred a right to their large property as others
have to theirs which is smaller ; that oppression to them is
as possible, and as wicked, as to others ; that stealing, rob-
bing, cheating, are the same crimes and sins, whether com-
mitted against them or others. The rich, therefore, ought
to have an effectual barrier in the constitution against being
robbed, plundered, and murdered, as well as the poor ; and
this can never be without an independent senate. . The
poor should have a bulwark against the same dangers and
oppressions ; and this can never be without a house of repre-
sentatives of the people. But neither the rich nor the poor
can be defended by their respective guardians in the consti-
tution without any executive power, vested with a negative,
equal to either, to hold the balance even between them, and
to decide when they cannot agree."

In this balanced government, it is necessary to keep the
executive power entirely out of the people's hands, "and
give the property and liberty of the rich a security in the
senate, against the encroachments of the poor in a popular

THE POLITICAL ECONOMY OF JOHN ADAMS 311

assembly. Without this, the rich will never enjoy any
liberty, property, reputation, or life, in security. The rich
have as clear a right to their liberty and property as the
poor : it is essential to liberty that the rights of the rich be
secured ; if they are not, they will soon be robbed and
become poor, and in their turn rob their robbers, and thus
neither the liberty or property of any will be regarded. . . .
If debts are once abolished, and goods are divided, there will
be the same reason for a fresh abolition and division every
month and every day ; and thus the idle, vicious, and aban-
doned will Hve in constant riot on the spoils of the in-
dustrious, virtuous, and deserving. 'Powerful and crafty
underminers have nowhere such rare sport' as in a simple
democracy or single popular assembly. Nowhere, not in
the completest despotisms, does human nature show itself
so completely depraved, so nearly approaching an equal
mixture of brutality and devihsm, as in the last stages of
such a democracy, and in the beginning of that despotism
that always succeeds it."

Not only must the executive power be taken out of the
hands of the people, but, it will be noted, the legislative power
cannot be "wholly entrusted in their hands with a moment's
safety : the poor and the vicious would instantly rob the
rich and virtuous, spend their plunder in debauchery, or
confer it upon some idol, who would become the despot;
or, to speak more intelhgibly, if not more accurately, some
of the rich, by debauching the vicious to their corrupt in-
terest, would plunder the virtuous and become more rich,
until they acquired all the property, or a balance of property
and of power, in their own hands, and domineered as despots
in an oHgarchy." ^ The rich as a class should therefore have

* This propensity of the propertyless to confiscation and of the rich to intrigue
in self-defence and self-aggrandizement, Adams noted in a letter written to the
Revolutionary hero, Samuel Adams, in 1790, in which he said: "Without these

312 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

a permanent safeguard in the upper house of the legislature,
the senate.

Another institution well calculated to maintain the balance
between the rich and poor — the status quo — is an "inde-
pendent" judiciary. Under majority rule, the rights of
property cannot even be adequately protected in courts
dependent on majorities. "An upright, independent, ju-
diciary tribunal, in a simple democracy, is impossible. The
judges cannot hold their commissions but durante bene
placito of the majority; if a law is made, that their com-
missions shall be made quamdiu se bene gesserint, this may
be repealed whenever the majority will, and, without repeal-
ing it, the majority are only to judge when the judges behave
amiss, and therefore have them always at mercy. When
disputes arise between the rich and poor, the higher and the
lower classes, the majority in the house must decide them;
there is no possibility, therefore, of having any fixed rule to
settle disputes and compose contentions ; but in a mixed
government the judges cannot be displaced but by the con-
currence of two branches, who are jealous of each other, and
can agree in nothing but justice ; — the house must accuse,
and the senate condemn ; this cannot be without a formal
trial, and a full defence. In the other [a simple government],
a judge may be removed, or condemned to infamy, without
any defence or hearing or trial."

This inherent incapacity of the people for restrained direct
government does not mean of course that they are to be
excluded entirely from all share in the government. On

[proper checks], the struggle will ever end only in a change of impostors. When
the people, who have no other property, feel the power in their own hands to de-
termine all questions by a majority, they ever attack those who have property, till
the injured men of property lose all patience, and recur to finesse, trick, and strata-
gem, to outwit those who have too much strength, because they have too many
hands to be resisted in any other way." John Adams, Life and Works, Vol. VI,
p. 418.

THE POLITICAL ECONOMY OF JOHN ADAMS 313

the contrary, "the people's fair, full, and honest consent
to every law by their representatives must be made an essen-
tial part of the constitution : but it is denied that they are
the best keepers, or any keepers at all, of their own liberties
when they hold collectively or by representation the execu-
tive and judicial power, or the whole and uncontrolled legis-
lative ; on the contrary, the experience of all ages has
proved that they instantly give away their liberties into
the hands of grandees, or kings, idols of their own creation.
The management of the executive and judicial powers
together always corrupts them, and throws the whole power
into the hands of the most profligate and abandoned among
themselves. The honest men are generally nearly equally
divided in sentiment, and therefore the vicious and unprin-
cipled always follow the most profligate leader, who bribes
the highest, and sets all decency and shame at defiance :
it becomes more profitable and reputable too, except with
a very few, to be a party man than a pubHc-spirited
one.

This "balanced" system based upon the recognition of the
division of society into rich and poor and of the necessity
of preventing either class from conquering the other, by
having an independent executive and judiciary to act as
"mediators" laid Adams open to the charge of being a
monarchist and an aristocrat at heart. In fact, however,
he was not much concerned with titles as such ; he was more
concerned with the substance than the fictions of govern-
ment. Nedham's doctrine that the children of the com-
mon people should be educated into disHke and enmity for
kingly government, Adams contended, was "a most iniqui-
tous and infamous aristocratical artifice, a most formidable
conspiracy against the rights of mankind, and against that
equality between gentlemen and the common people which

314 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

nature has established as a moral right, and law should or-
dain as a political right, for the preservation of liberty.
By kings, and kingly power, is meant, both by our author
and me, the executive power in a single person. American
common people are too enlightened, it is hoped, ever to fall
into such a hypocritical snare ; the gentlemen, too, it is
hoped are too enlightened, as well as too equitable, ever to
attempt such a measure ; because they must know that the
consequence will be, that, after suffering all the evils of
contests and dissensions, cruelty and oppression, from the
aristocratics, the common people will perjure themselves,
and set up an unlimited monarchy instead of a regal re-
pubhc."

Nevertheless, if the proper balance of classes in the gov-
ernment will not obviate the evils of factious democracy,
there is, in Adams' opinion, but one other recourse :
"neither philosophy nor policy has yet discovered any
other cure, than by prolonging the duration of the first
magistrate and senators. The evil may be lessened and
postponed, by elections for longer periods of years, till
they become for life ; and if this is not found an adequate
remedy, there will remain no other but to make them heredi-
tary. The delicacy or the dread of unpopularity that
should induce any man to conceal this important truth
from the full view and contemplation of the people would
be a weakness, if not a vice."

That Adams contemplated the creation of an hereditary
aristocracy is not to be supposed, but his notion of a senate
was far removed from the idea of rotation in office and
social equality which is associated with Jeffersonian democ-
racy— often quite erroneously. Adams saw the objec-
tions to the descent of titles through the eldest son, no
matter how, depraved to the exclusion of other sons, no

THE POLITICAL ECONOMY OF JOHN ADAMS 315

matter how excellent; and he likewise saw the objections
to maintaining decayed families in power on grounds of
birth alone. But he asks : "Are not the senators, whether
they be hereditary or elective, under the influence of power-
ful motives to be tender and concerned for the security of
liberty?" The spirit and genius of the state are preserved
by living tradition. "What stronger motive to virtue, and
to the preservation of liberty, can the human mind perceive,
next to those of rewards and punishments in a future life,
than the recollection of a long line of ancestors who have
sat within the walls of the senate and guided the councils,
led the armies, commanded the fleets, and fought the battles
of the people? ... If the people have the periodical
choice of these, we may hope they will generally select those,
among the most conspicuous for fortune, family, and wealth,
who are most signalized for virtue and wisdom. . . . Let
the people have a full share, and a decisive negative : and,
with this impregnable barrier against the ambition of the
senate on one side, and the executive power with an equal
negative on the other, such a council will be found the
patron and guardian of liberty on many occasions, when the
giddy, thoughtless multitude, and even their representa-
tives, would neglect, forget, or even despise and insult it."
Moreover, the one constitution which most nearly ap-
proaches the ideal of the perfectly balanced government
so highly praised by Adams is the English Constitution.
"A science," he says, "certainly comprehends all the prin-
ciples in nature which belong to the subject. The princi-
ples in nature which relate to government cannot all be
known without a knowledge of the history of mankind.
The English constitution is the only one which has consid-
ered and provided for all cases that are known to have
generally, indeed to have always, happened in the progress

316 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

of every nation ; it is, therefore, the only scientifical govern-
ment. To say then that standing powers have been erected,
as mere artificial devices of great men, to serve the ends of
avarice, pride, and ambition of a few, to the vassaUzing of
the community, is to declaim and abuse. Standing powers
have been instituted to avoid greater evils, corruption,
sedition, war, and bloodshed, in elections ; it is the people's
business, therefore, to find out some method of avoiding
them without standing powers. The Americans flatter
themselves they have hit upon it ; and no doubt they have
for a time, perhaps a long one ; but this remains to be proved
by experience."

Adams' system of political science may be summed up
in the following manner :

1. Society is divided into contending classes, of which
the most important and striking are the gentlemen and
common people, or to speak in economic terms, the rich and
the poor.

2. The passion for the acquisition of property or the
augmentation of already acquired property is so great as
to override considerations arising out of rehgious or moral
sentiments.

3. Inevitably the rich will labor to increase their riches
at the expense of the poor, and if unchecked, will probably,
on account of their superior ingenuity and wisdom, absorb
nearly all of the wealth of the country.

4. Out of the contest for economic goods arise great politi-
cal contests in society, particularly between the rich and the
poor. Such contests have ended for the most part in the
poor committing themselves to an absolute monarch to
secure protection against the predatory rich.

5. The other possible outcome of the contest is the spo-
Uation of the rich by the poor, and this is what happens in

THE POLITICAL ECONOMY OF JOHN ADAMS 317

a simple democracy where the majority, unchecked by
other than moral considerations, is permitted to rule.

6. Liberty, that is, the preservation of the right of the
poor against further spoliation and the rich against at-
tacks by communistic levellers, depends entirely upon
the maintenance of order and the status quo.

7. Moral and. religious considerations or mere theoretical
notions about freedom, however widely entertained, are not
sufficient to maintain liberty against the assaults of the
contending factions.

8. Therefore, the constitution must embody in it a repre-
sentation of the rich and poor as distinct orders ; and a
tertium quid in the form of an independent executive holding
for as long a term as possible should be introduced as a
check on both the contending classes. Finally, an inde-
pendent judiciary should be established as a check on all the
other branches and subject to removal only by the cooper-
ation of the representatives of the two contending classes,
from whose ambitions dangerous attacks on liberty and
property may be expected.

There are one or two features of Adams' system of polit-
ical science which deserve special consideration in relation
to the fortunes of the Federalist and Jeffersonian parties.
Although Adams frankly believed that the doctrine of direct
popular sovereignty was dangerous to the acquired rights of
the rich, he by no means believed in the right of the rich
to practise their innate predatory habits on the poor. His
society and his balanced government were static. He did
not contemplate the possibility of new and extraordinary
modes of accumulating wealth. In his system there was
no inherent opposition between landed property and per-
sonalty. But it appears that his philosophy of personalty

318 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

did not carry him so far as to approve the methods of
financial accumulation associated with Hamilton's policy.
In fact, Adams was often declared to be a foe of the funding
system and its accessories. He believed in the protection
of the rights of the rich against the poor and the creation of
a system of government that would guarantee the perma-
nence of that protection. For this he received the cordial
approbation of the Federalist school. But most of the
Federalist leaders were involved in the speculative methods
of accumulation which flourished with the funding system,
and they could hardly have been expected to look upon
any of the lawful modes employed by themselves as pred-
atory in character.

Such being the practical views of Adams, it is not diffi-
cult to discover an important ground of difference between
him and Hamilton in matters of public policy. The former
feared the rich almost as much as the poor, believing that
they were as prone to use the government in spoliation as
the latter. Hamilton does not seem to have regarded the
rich as a danger to the state. On the contrary, he viewed the
rich and well born as the safest depositaries of public power,
although he advocated the admission of the propertyless
to a speaking voice in the government. Adams did not
view the conflict as a struggle between personalty and real
property owners but between the rich and poor, although
in his classification most of the farmers and petty trades-
men were placed in the latter category. Hamilton was
essentially the spokesman of the commercial and financial
classes. Contrary to contemporary misrepresentation, it
would appear that Adams' property was in land rather
than stock and bonds. ^ In fact his biographer says that
"in Mr. Adams's vocabulary, the word property meant

» Life and Works, Vol. I, p. 638.

THE POLITICAL ECONOMY OF JOHN ADAMS 319

land. He had no confidence in the permanence of any-
thing else." Such a man was not temperamentally fitted
to become the leader of a party founded principally upon
capitalistic as opposed to landed interests. Hamilton
believed that his fiscal and commercial policy was advan-
tageous to the beneficiaries and the nation at large ; he
wanted positive action in support of those policies, not
"mediation" between contending factions. Under the
circumstances it is not surprising that Adams had about
as much sympathy for Jefferson as for Hamilton.

Another feature of Adams' system was his grouping of \/
the poor, urban and agrarian, in one mass and his attribu-
tion to them of an inclination, fortified by passion and
interest, to despoil the rich. This was not very flattering
to the ethical standards of the masses, and may have helped
to turn against the Federalist party the laboring classes
that were steadily increasing in the cities and that had been,
apparently, in support of the adoption of the Constitution I
during the contest over ratification. In an age when most
of the political writings exalted popular sovereignty and
flattered the people, Adams had the courage of his convic-
tions and wrote out with great labor and pains his dis-
belief in simple direct popular rule. What many other
statesmen before and since have said privately, Adams pub-
lished in a laboriously systematic form. Only one other V
man of the period expressed similar political doctrines with
equal clarity, and that was the man whom Jefferson selected
to succeed him in the presidency — James Madison, author
of Number Ten of The Federalist, — but Madison an-
nounced his views anonymously.

Although the system of political economy laid down in
the Defence of American Constitutions had no direct refer-
ence to the course of party politics in the United States,

320 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

there is no doubt that Adams thought it entirely appli-
cable to the situation in America. He had no delusions about
special dispensations for the new nation ; and in a tract
prepared in 1808 he showed the bearing of his doctrines
upon the problems of his fellow countrymen, saying: "We
do possess one material which actually constitutes an aris-
tocracy that governs the nation. That material is wealth.
Talents, birth, virtues, services, sacrifices are of httle con-
sideration with us. The greatest talents, the highest vir-
tues, the most important services are thrown aside as useless
unless they are supported by riches or parties, and the object
of both parties is chiefly wealth. ... In the Roman history
we see a constant struggle between the rich and the poor
from Romulus to Caesar. The great division was not so
much between patricians and plebeians, as between debtor
and creditor. Speculation and usury kept the state in
perpetual broils. The patricians usurped the lands and
the plebeians demanded agrarian laws. The patricians
lent money at exorbitant interest and the plebeians were
sometimes unable and always unwilling to pay it. These
were the causes of dividing the people into two parties, as
distinct and jealous, and almost as hostile to each other,
as two nations. Let Mr. Hillhouse [to whom the tract is
directed] say whether we have not two parties in this coun-
try springing from the same sources ? Whether a spirit for
speculation in land has not always existed in this country,
from the days of WilUam Penn, and even long before?
Whether this spirit has not become a rage from Georgia
to New Hampshire, within the last thirty years ? Whether
foundations have not been laid for immense fortunes in a few
families, for their posterity? Whether the variations of a
fluctuating medium and an unsteady public faith have not
raised vast fortunes in personal property, in banks, in

THE POLITICAL ECONOMY OF JOHN ADAMS 321

commerce, in roads, bridged, &c. ? Whether there are not
distinctions arising from corporations and societies of all
kinds, even those of religion, science, and literature, and
whether the professions of law, physic, and divinity are not
distinctions? Whether all these are not materials for
forming an aristocracy? Whether they do not in fact
constitute an aristocracy that governs the country? On
the other side the common people, by which appellation I
designate the farmers, tradesmen, and laborers, many of
the smaller merchants and shopkeepers, and even the
unfortunate and necessitous, who are obliged to fly into
the wilderness for a subsistence, and all the debtors, cannot
see these inequalities without grief and jealousy and re-
sentment. . . . They throw themselves naturally into the
arms of the party whose professed object is to oppose the
other party. Two such parties, therefore, always will exist,
as they always have existed, in all nations, especially in
such as have property, and most of all, in commercial coun-
tries. Each of these parties must be represented in the
legislature, and the two must be checks on each other.
But, without a mediator between them, they will oppose
each other in all things and go to war till one subjugates
the other. The executive authority is the only one that
can maintain peace between them." ^

1 Li^e and Works, Vol. VI, p. 530.

CHAPTER XII

THE POLITICS OF AGRARIANISM

John Adams' theory that an aristocracy of wealth must
exist in every society and that every constitution of govern-
ment must be based upon this inexorable fact was assailed
by John Taylor, of Caroline county, Virginia, who may be
called the philosopher aiid statesman of agrarianism. Like
Adams, Taylor was a man of affairs as well as a close student
of history. He served his party acceptably in the House of
Representatives and the Senate of the United States ; he
was the most trenchant and pertinent of all the Republi-
can pamphleteers ; and he was, perhaps, the most sys-
tematic thinker that Eis party produced within the two
decades which followed the adoption of the Constitution.
During his legislative career, he wrote powerful Anti-Fed-
eralist tracts which must have seriously disconcerted the
opposition, and during his later years he carefully worked
into a somewhat coherent philosophy the preconceptions
upon which he had based his program of practical action.

This system of politics, embraced in a weighty volume of
636 pages, was published at Fredericksburg in 1814. It
bears the title of An Inquiry into the Principles and Policy
of the Government of the United States. Without doubt it
may be justly accepted as the text-book of agrarian politi-
cal science, conceived in opposition to capitalism and dedi-
cated to a republic of small farmers. Certainly the great
leader of the Republican party, Jefferson, received it as

322

THE POLITICS OF AGRARIANISM 323

such.^ Whatever its shortcomings in proHxity of style, it
deserves to rank among the two or three really historic
contributions to political science which have been produced
in the United States. Even if we admit that the author
was looking backward, still must his book be reckoned among
the first pieces of American political literature, in that it
sought some genuine economic foundations for the equali-
tarian political democracy to which the country was theo-
retically committed.

At the outset of his plea for a republic based upon sub-
stantial equality, Taylor is compelled to face Adams' fun-
damental proposition that such a system of government
is impossible because the sources of inequality "are founded
in the constitution of nature," and cannot be eradicated,
no matter what institutional devices are invented.^ The
Virginia author does not shrink from the task of meeting
this formidable dogma which looks like an axiom in mathe-
matics. He simply denies its validity. He will not admit
that the great differences in wealth, the abysmal division
into rich and poor, are historically the product of the in-
dustry of the few and the sloth of the many.^ On the
contrary, he holds that the older aristocracies, clergy and
feudal lords, were begotten of fear of the gods and military
conquest [p. 27], in a word, by exploitation, not by thrift
and savings.

Feudal institutions built upon this class foundation are
therefore not schemes of government devised to protect
the accumulations springing from the exercise of primitive
virtues, but mere juristic justifications of a status quo,
originally established by craft and material forces. Such
legal institutions, however, in time, come to be merely the

» Works (Washington ed.), Vol. VII, p. 191.

* For Adams' reply to Taylor, see John Adams, Life and Wo)-ks, Vol. VI, pp. 445 fP.

324 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

safeguard of that of which they were originally the expression,
and thus the overthrow of the clerical and feudal classes
can be brought about by dissolving their economic founda-
tions. For instance, follow the example of Henry VIII in
seizing the property of the church, or of the French Revolu-
tionists in abolishing feudal rights, and the priestly and
feudal classes as ruling castes will disappear. Prohibit pri-
mogeniture and introduce the division and subdivision of
great landed estates and the landed aristocracy will go to
pieces. This is what has happened in Europe, and accord-
ingly, it is futile [concludes Taylor] to speak of the aristoc-
racies of the old world as inevitable products of human
nature and the experience of Europe as a guide to the
makers of American institutions.

The older and more obvious aristocracies simply cannot
arise in America. Diversity of religion and diffusion of
learning will prevent the appearance of a priestly caste, and
alienation of estates will exclude a landed class from our
shores. An aristocracy of "talents and virtues" cannot
endure because education is so widespread. An aristoc-
racy cannot spring up through commercial transactions
because in the course of trade there is "a natural distribu-
tion of riches" ; in other words free competition will keep
down the mighty. Consequently, in shaping tTieir political
institutions, the people of the United States need have no
fear of such aristocracies. "Why has Mr. Adams written
volumes to instruct us how to manage an order of nobles,
the sons of the Gods, of exclusive virtue, talents and wealth,
and attended by the pomp and fraud of superstition ; or
one of feudal barons, holding great districts of unalienable
country, warlike and high spirited, turbulent and dangerous ;
now that these orders are no more [p. 15]."

While wasting time in drawing illustrations from Europe,

THE POLITICS OF AGRARIANISM 325

Adams overlooks the real sources of danger to American
republicanism, namely, a capitalistic aristocracy of "paper
and patronage, more numerous, more burdensome, unex-
posed to public jealousy by the badge of title, and not too
honorable or high spirited to use and serve executive power,
for the sake of pillaging the people [p. 15]." This new aris-
tocracy, built upon modern fiscal and banking institutions,
has abandoned "a reliance on the monopoly of virtue,
renown and abilities, and resorted wholly to a monopoly
of wealth, by the system of paper and patronage. Modern
taxes and frauds to collect money, and not ancient authors,
will therefore afford the best evidence of its present char-
acter [p. 29]." This new form of exclusive wealth, built
upon " monopoly and incorporation," — legal privileges, — is
the most formidable source of aristocracy with which man-
kind has to deal, and it can only be prevented by heroic
remedies [p. 10]. It is "without rank or title ; regardless of
honor ; of insatiable avarice." It is not conspicuous for
virtue and knowledge, and it is "not capable of being col-
lected into a legislative chamber." Nevertheless "differ-
ing in all its qualities from Mr. Adams' natural aristocracy
and defying its remedy, it is condensed and combined by an
interest, exclusive and inimical to public good [p. 15]."
Strong as it is in the United States where it has no natural
aristocracies to oppose it solidly, it is equally strong in feudal
Europe, and is able to dominate other classes.

How much greater is the power of a capitalist aristocracy
than that of priestcraft or feudalism may be imagined by
supposing the result if the people of England should attempt
to abolish the monarchy. "Both the aristocracy of the
present age, and the nobility would arrange themselves in
its defence. Which would be most formidable? The rem-
nant or hieroglyphick of the feudal system, would indeed

326 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

display a ridiculous pomp, and imbecile importance ; it
would appear armed with title, ribbon and symbol, and
evince its weakness by tottering under shadows. But the
real aristocracy of the present age ; neither begotten by the
Gods, the curse of conquest, nor the offspring of nature ;
the aristocracy of patronage and paper would draw out its
fleets, armies, public debt, corporate bodies and civil offices.
Which species of aristocracy, I ask again, would be the
strongest auxiliary for despotism, and the most dangerous
enemy to the nation? And yet Mr. Adams has written
three volumes, to excite our jealousy against the aristoc-
racy of motto and blazen, without disclosing the danger from
the aristocracy of paper and patronage ; that political
hydra of modern invention, whose arms embrace a whole
nation, whose ears hear every sound, whose eyes see all
objects, and whose hands can reach every purse and every
throat [p. 22]."

Having thus w^arned his readers in general terms against
the new aristocracy, Taylor proceeds to describe its methods
in detail and compare it with the aristocracies that have
gone before. It divides society into contending classes and
brings class hatred ; it cannot be checked and watched
like a legally recognized class ; it is just as burdensome to
the producers as were the feudal and priestly classes ; it is
more implacable in its demands and is never softened by
human considerations as were the priests and landlords
through their personal relations with the exploited ; its
methods are so subtle that they almost escape notice ; and
it defends itself by a serried array of "catch" phrases as did
the aristocracies of old. These charges we may take up
seriatim in Taylor's own language.

Paper and patronage are an infallible source of oppression
and hatred in society. "Human conception is unable to

THE POLITICS OF AGRARIANISM 327

invent a scheme, more capable of afflicting mankind with
these evils, than that of paper and patronage. It divides
a nation into two groups, creditors and debtors ; the first
supplying its want of physical strength, by alHances with
fleets and armies, and practising the most unblushing corrup-
tion. A consciousness of inflicting or suffering injuries, fills
each with malignity toward the other. ... A legislature, in
a nation where the system of paper and patronage prevails, will
be governed by that interest, and legislate in its favour. It is
impossible to do this without legislating to the injury of
the other interest, that is, the great mass of the nation.
Such a legislature will create unnecessary offices, that them-
selves or their relations may be endowed with them. They
will lavish the revenue to enrich themselves. They will
borrow for the nation, that they may lend. They will
offer lenders great profits that they may share in them
[39]."

It is impossible to place any effective check upon this
aristocracy of paper. If the wealth of a class "consists of
land, it may be measured and balanced. Suppose a nation
should establish a landed nobility, and should conclude
that the possession of one-third of the lands would confer
a share of wealth on this order so unequal as to make it
unmanageable, and of course despotick ; this nation might
restrict their landed order to one-fourth of all the lands in
the state, concluding that the three-fourths divided among
all other orders, might suffice to check the power arising from
condensing one-fourth in one interest. This is what Lord
Shaftesbury meant by a 'balance of property.' But if an
order of paper and patronage is erected, (remember that
nothing makes an order but one interest,) in what manner
is its power to be checked by a balance of property? The
wealth of paper and patronage is daily growing, wherefore

328 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

it cannot be measured or limited ; it is therefore impossible
to balance it ; and yet without this balance of property,
the power which chngs to wealth, will destroy liberty, even
in the opinion of the English theorists [p. 51]."

The aristocracy of paper is a burden upon the producers.
Like the Physiocrats, Taylor traces the source of wealth to
the products or profits of the land, and by an ingenious
method he endeavors to show that a paper aristocracy sub-
sisting upon the profits of the land is a no less burdensome
aristocracy than one of rank and title. "By taxation, the
profit arising from land may be apportioned between the
possession and the system of paper and patronage ; or it
may be wholly transferred to the system. If then an order,
such as the late nobility and clergy of France, by an income
consisting of the profit of one-third of the lands of France,
attracted a degree of power oppressive to the nation ; does
it not evidently follow, whenever the system of paper and
patronage, has acquired one-third of the profit produced by
all the lands of a nation, that it will also acquire the oppres-
sive degree of power, interwoven with that degree of
wealth [p. 52]." ^

Taylor then applies this theory to the United States to
show that the American agrarian has as much reason for
hating the oppressive burden of the capitalistic system as
the French peasant had for hating the feudal burden im-
posed upon him by privileged orders. "All the exports
from the United States, may probably amount to the whole
profit yielded by land, allowing subsistence to the
possessors, which forms no part of rent or profit. This
amount has never extended to sixty-millions of dollars an-
nually, yet for the purpose of including the whole, we will

• For a Republican estimate of the comparative wealth of the "paper aristoc-
racy," Bee above, p. 220.

THE POLITICS OF AGRARIANISM 329

estimate the annual profit of the land at that sum. If the
interest of paper and patronage received twelve millions
annually from direct taxation, and eight millions annually
from indirect, by bounties and the circulation of bank
paper, then this system would possess that degree of wealth,
which rendered the former civil and religious nobility of
France, dangerous and oppressive ; and it would be obvious,
that a system, which had so rapidly absorbed one-third of
the profit of the land of the United States, possessed a capac-
ity of extending that third to a moiety, or even beyond a
moiety, as in England [p. 52]."

A paper aristocracy is more inhuman and more implacable
in the pursuit of its interest than an aristocracy of conquest.
"A nation exposed to a paroxysm of conquering rage, has
infinitely the advantage of one subjected to this aristocrati-
cal system. One is local and temporary ; the other is spread
by law and is perpetual. One is an open robber, who warns
you to defend yourself ; the other a sly thief, who empties
your pockets under a pretense of paying your debts. One
is a pestilence, which will end of itself ; the other a climate
deadly to liberty. After an invasion, suspended rights may
be resumed, ruined cities rebuilt, and past cruelties for-
gotten ; but in the oppressions of an aristocracy of paper and
patronage, there can be no respite ; so long as there is any-
thing to get, it cannot be glutted with wealth ; so long as
there is anything to fear, it cannot be glutted with power ;
other tyrants die ; this is immortal. A conqueror may have
clemency ; he may be generous ; at least he is vain, and may
be softened by flattery. But a system founded in evil moral
qualities, is insensible to human virtues and passions, in-
capable of remorse, guided constantly by the principles
which created it, and acts by the iron instruments, law,
armies and tax gatherers. With what prospect of success,

330 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

reader, could you address the clemency, generosity, or vanity
of the system of paper and patronage [p. 41] ?"

Of course the paper system makes fine pretensions to
national usefulness. "It promises to diminish, and ac-
cumulates; it promises to protect, and invades. All po-
litical oppressors deceive, in order to succeed. When did
an aristocracy avow its purpose? Sincerity demanded of
that of the third age [the paper aristocracy] the following
confession : ' Our purpose is to settle wealth and power upon
a minority. It will be accomplished by national debt,
paper corporations, and offices, civil and military. These
will condense king, lords and commons, a monied faction
and an armed faction, in one interest. This interest must
subsist upon another, or perish. The other interest is
national, to govern and pilfer which, is our object ; and its
accomplishment consists in getting the utmost a nation can
pay. Such a state of success can only be maintained by
armies, to be paid by the nation and commanded by this
minority ; by corrupting talents and courage ; by terrifying
timidity ; by inflicting penalties on the weak and friendless,
and by distracting the majority by deceitful professions.
That with which our project commences is invariably a
promise to get a nation out of debt ; but the invariable effect
of it, is to plunge it irretrievably into debt ' [p. 40]."

The methods of the paper or capitalist aristocracy are so
subtle and so closely wrapped up in public policy that it is
almost impossible to lay them bare. Moreover, it has its
system of moral and philosophical defence which frightens
off the investigator. "Tlie difficulty of producing a correct
opinion of the cause and consequences of the new born
aristocracy of paper and patronage, surpasses the same dif-
ficulty in relation to the aristocracies of the first and second
ages, as far as its superior importance. The two last being

THE POLITICS OF AGRARIANISM 331

substantially dead, their bodies may be cut up, the articula-
tion of their bones exposed, and the convolution of their
fibres unravelled; but whenever the intricate structure of
the system of paper and patronage is attempted to be dis-
sected, we moderns surrender our intellects to yells uttered
by the living monster, similar to those with which its pred-
ecessors astonished, deluded, and oppressed the world for
three thousand years. The aristocracy of superstition
defended itself by exclaiming, the Gods ! the temples ! the
sacred oracles! divine Vengeance! the Elysian fields! —
and that of paper and patronage exclaims, national faith !
sacred charters! disorganization! and security of prop-
erty [p. 31]!"

So great is the spell cast over the intellect by the moral
devices of the paper aristocracy that the credulous American
pubhc is thoroughly deceived by fine words. The devices
of the old privileged orders — titles, ribbons, splendors,
pomp, honors, eternal and temporal penalties — have been
penetrated and exploded ; they can be no longer used in the
United States to keep the masses satisfied. But the sham
defences of the new order of paper are treated seriously:
"We moderns; we enlightened Americans; we who have
aboHshed hierarchy and title ; and we who are submitting
to be taxed and enslaved by patronage and paper, without
being deluded or terrified by the promise of heaven, the
denunciation of hell, the penalties of the law, the brilliancy
and generosity of nobility, or the pageantry and charity of
superstition. A spell is put upon our understandings by
the words 'public faith and national credit,' which fascinates
us into an opinion that fraud, corruption and oppression
constitute national credit; and debt and slavery, pubhc
faith [p. 61]."

This is all very curious indeed, for on the eve of the

332 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Revolution, the Americans were quick enough to see that
they were being exploited by Great Britain through taxes
and other devices. At that time they scornfully rejected
Dr. Johnson's celebrated argument that taxation was no
slavery. They were able to see that they were being robbed
when they were taxed by another nation, but now they are
not keen enough to discover exploitation by a class at home.
Yet, "it is strange, that it is so difficult to distinguish be-
tween honest and fraudulent taxes, imposed by a minor
interest on the public interest, and so easy to discern the
real design of taxes imposed by one nation upon another.
In the latter case, monopoly is clearly understood to be an
indirect mode of taxation. The United States know that
the monopoly of their commerce by the English, was a
tribute ; but they refused to know, that the monopoly of
a circulating medium by banking is also a tribute. Useless
offices, established here by the English government, were
clearly perceived to be a tribute ; but useless offices es-
tablished by our own government are denied to be so. Pre-
texts for taxation invented by England were detected by
dullness herself; but pretexts invented at home seem to
deceive the keenest penetration. . . . Dr. Johnson's maxim
could never convince us, that taxation by banking, funding
systems, protecting duties or patronage was no slavery, if
the profits arising from such institutions were received by
English capitalists : does the substitution of a different
receiver [i.e., American capitalists] alter the case [pp.
48-50]?"

Powerful as the system of paper and patronage is and in-
sidious and dangerous as are its methods, the Constitution
strangely enough makes no safeguards against it. "The
Americans devoted their effectual precautions to the obsolete
modes of title and hierarchy, erected several barriers against

THE POLITICS OF AGRARIANISM 333

the army mode, and utterly disregarded the mode of paper
and patronage. The army mode was thought so formidable,
that military men are excluded from legislatures and limited
to charters or commissions at will ; and the paper mode so
harmless, that it is allowed to break the principle of keeping
legislative, executive, and judicative powers separate and
distinct, to infuse itself into all these departments, to unite
them in one conspiracy, and to obtain charters or commis-
sions for unrestricted terms, entrenched behind publick
faith and out of the reach, it is said, of national will ; which
it may assail, wound, and destroy with impunity. This
jealousy of armies and confidence in paper system can only
be justified, if the following argument of defence is cor-
rect : . . . ' Soldiers, admitted to the legislature, would
legislate in favour of soldiers ; but stock jobbers will not
legislate in favour of stockjobbers [p. 42].'"

Having thus disposed of Adams' contention that an aris-
tocracy of wealth inevitably springs up out of inequalities
in human nature and set up the hypothesis that the paper
or capitalistic aristocracy of the United States is founded on
exploitation fostered by the policy of the government,
Taylor then turns to an examination of the fiscal system
which is the source of this new danger to republican institu-
tions. In two long and elaborate chapters he analyzes
funding and banking as economic processes and as signifi-
cant factors in politics, and expounds with considerable
precision, though not without diffuseness, his own doctrines
of political economy.

Broadly speaking, these doctrines may be summarized
in a preliminary fashion as follows : (1) Funded debts,
banks authorized to issue paper, and protective tariffs are
capitalistic devices for wringing money out of the producers
of real wealth — commodities ; in fact Taylor sometimes

334 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

speaks of "the paper stock capitalists." (2) Commerce, if
let alone, would perform a useful social function of exchange
and would not be guilty of exploitation if not involved with
paper stock capitahsm. (3) The paper stock group thrives
as a parasite upon the landed class particularly ; it concen-
trates in cities ; it draws to it the best brains of the coun-
try; and it enjoys a power altogether out of proportion to
its numerical strength. (4) The landed class being numer-
ous, greatly divided through the minute division of landed
property, and without many of the advantages of education
enjoyed by the capitalist class in the towns, is likely to be
overwhelmed by the latter in contests for power. (5) This
class division is the source of party divisions. (6) The
landed interest is the only true basis of democracy — a de-
fence against communism on the one hand and capitalistic
exploitation on the other. (7) The solution of the contra-
dictions is the destruction of the "paper aristocracy" by the
destruction of its government privileges. These several
principles we may now examine as they are stated in Tay-
lor's own words.

(1) To the first proposition, namely, that funded debts,
paper issuing banks, and protective tariffs are engines for
exploiting the producers of wealth, Taylor devotes the most
attention. With regard to the funded debt, he comes to
the conclusion that it is a fraud upon the present and future
generations when considered from an economic point of
view alone. Anticipation in the form of debt, he says,
''does not conjure into real existence, the commercial,
agricultural or manufactured products of futurity. It
does not add to the corn or coin of the realm. ... It
cannot bring up from futurity a gun, a soldier, a ration or a
cartridge. The present generation suffers every hardship
and cost of war, although anticipation pretends that it is

THE POLITICS OF AGRARIANISM 335

suffered by future generations. And this delusion is used
to involve nations in wars, which they would never com-
mence, if they knew that all the expense would fall upon
themselves. It is twice suffered ; by the living, who supply
all the expenses of war ; and by the unborn, who supply an
equivalent sum, to take up certificates of the expenses paid
by the living. No item of the expense of war is more trans-
ferable from the living to the unborn, than the blood it
sheds. ... A maniac, whose income in kind is just suffi-
cient to support him, takes it into his head to give his bonds
to sundry people annually for its value, whilst he is con-
suming it. At the end of fourteen years his whole income
is gone, though he has only expended its annual amount.
Such is anticipation to nations. But those who use it to
deceive, plunder and enslave them, artfully liken it to the
case of a man who buys an estate on credit, or who gives
bonds to himself [p. 249]."

A funded debt is not only economically a fraud at the out-
set, but it continues to be an ingenious method whereby one
class may take from another. "It only conjures the wealth
of existing people out of some hands into others ; and the
credit with which to buy property of the living given by the
certificate, constitutes all the solid wealth gained by antici-
pation [p. 249]." It is a shrewdly contrived engine for
confiscation. "All paper systems are, in fact, indirect laws
of confiscation, used for the purposes which induced the
French revolutionists to transfer more directly, a great
mass of landed property from their antagonists to them-
selves. These purposes simply were to enrich themselves
and establish their power. It was to enrich, and establish
the power of the Whigs, at the expense of the Tories that
Walpole used a paper system. In America, a paper confis-
cation system, conferred wealth and power on a monarchical

336 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

party at the expense of the Whigs. In both countries, those
who furnished the riches, lost much of their power and
property ; those who received them, gained it. The French
confiscations went boldly to their object, like a direct tax.
The English and American confiscations, secretly and cir-
cuitously effected their design, by the complication of a
paper system ; like an indirect tax. One seized and trans-
ferred the land itself. The others, mortgaged it ; artfully
leaving to the owner the appearance of property, whilst he
is only a receiver of the profits for the benefit of the mort-
gage [p. 255]."

In his long and diffuse chapter on banking, Taylor identi-
fies bank stock and bank currency with debt stock so far
as their exploitative character is concerned. In fact, in
his opinion, coin permits exploitation, for he says "even the
precious metals have furnished to the contrivers of pillage
and oppression a medium for extracting indirectly from
nations, a far greater proportion of their labor than they ever
could be made to pay directly by the feudal or any other
regimen [p. 292]." The only reason why the precious metals
do not afford unlimited means for "pillage" is because their
supply cannot be indefinitely extended by operations of the
human will.

Bank stock and currency, however, are not subject to
the limits imposed by nature on money made of the precious
metals. "An artificial currency is subject to no such check,
and possesses an unlimited power of enslaving nations, if
slavery consists in binding a great number to labor for a few.
Employed, not for the useful purpose of exchanging, but for
the fraudulent one of transferring property, currency is con-
verted into a thief and a traitor, and begets, like an abuse of
many other good things, misery instead of happiness. Man-
kind soon discovered that money was easily converted into

THE POLITICS OF AGRARIANISM 337

a medium for oppression as well as for commerce, and hence
arose nearly as strong a dislike to heavy taxes in money as
in kind ; it being clearly seen that labor and property were
transferred by money. This plain truth, awakened the
exertion of avarice and ambition, to deceive the vigilance
of labor and industry; the objects of pillage. The first
intricacy with which they endeavored to hide their design
was woven of indirect taxes travelling in mazes ; the second,
of loaning obscured by the mist of futurity ; and third, of an
artificial currency or banking, complicated by the crooked-
ness of its operation, flattering to industry, and restrained
by no natural check, as a medium of fraud and tyranny
[p. 292]."

In other words, the banking system is simply a "paper
feudal system." It represents no real wealth ; it creates no
real wealth. It is nothing more nor less than another
scheme for beguiling the nation and taxing labor and land.
"The certainty and simplicity with which a bank inflicts
and collects its profit, becomes still more visible. The
operation is carried on between a nation and a banking
corporation. The nation, through the channel of its
members, exchanges a thing called credit, reduced to the
form of bonds or notes for the payment of money, with the
corporation, giving a boot, profit or difference, of about
eight per centum per annum, which the bank bond, note or
credit, is arbitrarily made by law to be worth, beyond the
national bond, note or credit. This effect is produced by
subjecting the members of the nation to the payment of a
compound interest to the corporation on their bonds, notes
or credit, and absolving the corporation from the payment
of any interest to the members of the nation, on its bonds,
notes or credit ; and exhibits both the inevitability of the
tax, and a mode of its collection [p. 297]." In short, the

338 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

nation permits a private corporation, in return for a small
payment, to coin its credit into notes and then borrows those
notes at a high rate of interest, thus taxing itself for the
benefit of a bank stock aristocracy.

But it may be objected that the bank levy is simply a
tax on the voluntary borrower. "Should bread and water
be placed in abundance, before a hungry and thirsty multi-
tude, could their eating and drinking be fairly said to be
merely voluntary ? Currency is the medium for exchanging
necessaries. If gold and silver, the universal medium, are
legislated out of sight, all human wants unite to compel
men to receive the tax collecting substitute. This is bank-
ing. By the help of law it creates a necessity for its own
currency ; and this extreme hunger is misnamed volition.
The coin currency being expelled or drawn out of circulation,
to an extent sufficient to create a necessity for some sub-
stitute, the power possessing the right of supplying and
regulating that substitute, can inevitably so manage it,
as to enrich itself by means of that necessity. It can supply
the needed currency upon the terms and in the quantities it
pleases. And if fluctuations in currency, produced and man-
aged by chartered monopolies, can affect price or value, it
follows that, through his income, his money, and his prop-
erty, an individual is reached by the tax of this currency,
though he never borrowed or used it. Such sufferers do not
exercise the least formality of volition [p. 298]."

The bank stock scheme as ''a machine for transferring
property" is "more effectual than that made of hereditary
or exclusive wisdom. Both machines have been invented
for this purpose. The hereditary magnifies the defects
incident to human government in its best form, to hide its
own greater vices. The credit machine, in strict imitation
of this example, seizes upon the errors of paper money, as

THE POLITICS OF AGRARIANISM 339

reproaches against national credit ; and hides under them
its own greater aptitude to shrink from danger, and also its
capacities for corrupting governments and plundering na-
tions. Of the bad features in the face of paper money,
corporation credit makes two masks, one to hide its
hideousness, the other to hide the benefits of national
credit. If all the banks in the United States circulate
fifty millions of paper dollars, five millions of real property
will thereby be collected. . . . Are these great sums of
wealth no property? If they are property, to whom do
they belong ? If they belong to anybody, can they be trans-
ferred by laws and charters, under a policy, which considers
property as sacred [p. 308] ? "

Although Taylor directs his heaviest attack against the
funded debt and banking systems of exploitation created
by law, he by no means overlooks the protective tariff as
another capitalistic device for conjuring money out of the
pockets of the producers of real wealth. Of course, in his
day the latter engine had not developed to such formidable
proportions, but he had no doubt as to its capitalistic and
exploitative character. In fact, he flatly declares: "The
policy of protecting duties to force manufacturing, is of the
same nature, and will produce the same consequences as
that of enriching a noble interest, a church interest, or a
paper interest ; because bounties to capital are taxes upon
industry and a distribution of property by law. And it is
the worst mode of encouraging aristocracy, because, to the
evil of distributing wealth at home by law, is to be added
the national loss arising from foreign retaliation upon our
own exports. An exclusion by us of foreign articles of com-
merce, will beget an exclusion by foreigners of our articles
of commerce, or at least corresponding duties ; and the
wealth of the majority will be as certainly diminished to

340 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

enrich capital, as if it should be obliged to export a million
of guineas to bring back a million of dollars, or to bestow
a portion of its guineas upon this separate interest [p. 569]."

(2) Having outlawed funding, banking, and protective
tariffs as schemes designed to exploit the landed classes,
Taylor is compelled to pass judgment upon commerce as
well. Inasmuch as commerce is generally in the hands of a
group closely allied to the capitalistic circles, we might
expect to find Taylor condemning that economic interest
as roundly as the others ; but he refuses to put the men of
trade among the exploiters. He admits that "commerce,
monarchy, paper stock, legislative corruption, privileged
orders, charters of exclusive commerce, and hierarchy exist
together in England," but he holds that this is an unnatural
aUiance, because there is no real affinity between paper
stock and commerce. The latter has a useful and productive
function to perform, i.e., buying in the cheapest market
and selling in the dearest, and monopohes and paper char-
ters are its avowed enemies. The very fact that England,
with all her paper stock capital, is compelled to go to war
for commercial advantages, Taylor thinks, is conclusive
proof that paper stock is no friend to free commerce — per-
haps the most unsuccessful piece of reasoning in which he
indulges.

In spite of this enmity between commerce and artificial
restraints of various kinds, Taylor is forced to admit that
stocks, both national and commercial, are a goad to com-
mercial activities, but he beheves that a far better stimulant
is to be found in ''free and moderate government," allowing
trade to flow into natural channels where it can "buy cheap
and sell dear." The fact that commerce flourished so
vigorously under the Articles of Confederation without the
aid of paper capital is sufficient proof to him that no such

THE POLITICS OF AGRARIANISM 341

aid is needed now. Commerce must, therefore, break with
these unnatural aUiances and return to ''free" methods.
In other words, Taylor seems to have anticipated, in this
respect, the Manchester school. Or perhaps it would be
better to say that he had learned his lessons from Adam
Smith so far as this branch of his political economy is con-
cerned.

(3) That the paper stock group is a parasite upon the
landed class, Taylor has no doubts. He sketches the history
of the rise of the capitalistic Whigs in England as an element
deliberately imposed upon the landed gentry and adds :
"A paper system followed the revolution produced by the
present form of our general government, and operated upon
the landed Whigs here exactly as it had done upon the landed
Tories in England. It taxes them, enriches a credit or paper
faction ; changes property ; forms a party ; and transforms
its principles as in England [p. 254]." Sometimes Taylor
introduces labor also, but he has in mind principally labor
upon the land. On one occasion he remarks that the fund-
ing system is "an engine having no resemblance in interest
to land, labor or talents ; therefore it cannot be a friend
to either [p. 254]." And on another occasion he speaks of
the income of the paper stock aristocracy as drawn from
"land and labor [p. 271]."

Being a form of exploitation not unlike feudal dues, it
must perforce fall principally upon land in the United States,
for land constitutes the major interest, and, so far as the
eye of prophecy can see, is destined to remain the major
interest far into the future, if not forever. "Those who
furnish the subsistence, pay all the taxes. As subsistence
flows from the earth, that may be called the mother of men,
liable to make all the disbursements they need. Hence
all, or nearly all, taxes must be ultimately paid by agricul-

342 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

ture, and ought of course to be inflicted by her, if the doc-
trine is true, that the payer is the only just imposer of taxes.
Agriculture cannot be partial, because she cannot shift the
tax from her own shoulders. ... In the United States,
speculation, as it was called, bought of the family of the
earth an hundred millions at one shilling in the pound, and
then compelled it to repurchase it at twenty. This family
of the law soon disclosed its affection for its relations,
monarchy and aristocracy. Here too bank stock is already
annually extracting from the family of the earth, of labor
and of property, five times as much as the civil government
of the United States costs [p. 333]."

While thus thriving upon the landed proprietors, this
capitalistic aristocracy will steadily increase in power,
because "the weight of talents will follow leisure and
wealth." Moreover, political power concentrates as wealth
accumulates: "If wealth is accumulated in the hands of
the few, either by a feudal or a stock monopoly, it carries
the power also ; and a government becomes as certainly
aristocratical, by a monopoly of wealth, as by a monopoly
of arms [p. 275]." Accumulated wealth gives leisure and
talents and political power — the logic is inexorable. "As
paper property is accumulated, the leisure and income of
the holders will be increased. The weight of talents will
follow leisure and wealth ; and these will gradually acquire
a locality, corresponding to the abodes of the receivers of
stock taxation. This superiority of talents and wealth will
invest indixdduals, and the cities in which they will chiefly
reside, with an influence, well calculated to acquire an as-
cendancy over the landed interest, gradually impoverished
by division [p. 262]."

Particularly insidious is the power of the banking cor-
poration endowed with special privileges by the government

THE POLITICS OF AGRARIANISM 343

and always ready to bring sinister influences to bear in the
legislature. On this point Taylor writes with great feeling.
He had observed at first hand the course of politics during
the first administration and had unearthed by some skilful
investigation the actual participation of interested stock-
holders and speculators in the proceedings of Congress.^
He is not speaking of an academic matter, therefore,
when he says: "As all separate interests prefer them-
selves, and bend governments into subserviency to their
designs ; so one neither responsible, nor weakened by
division, nor made up of distinct independent interests, by
means of different departments and unconnected offices, will
act with a degree of concert and force, for its own aggrandize-
ment, which would be impracticable to the several govern-
ments in America. The banking power is therefore a
stronger, as well as a richer, power than the civil. The
holders of both will use the latter as an ally of the former ;
the two powers will unite in one, and all the checks in-
vented to control the civil power will be silently lost in the
illimitable influence of the stock power. A power of reg-
ulating property is engendered of a capacity to enslave
nations surpassing a power to regulate the press, as far as an
influence over a whole nation, or great factions, exceeds one
over a poor author [p. 312]."

(4) That the landed class is ill equipped to cope with
this powerful, insidious, and closely knit aristocracy of
capitalism, Taylor is thoroughly convinced. The very
democracy of our landed system — the division of land into
innumerable small farms tilled by owners of limited knowl-
edge — makes it more difficult for the landed group to unite
in a solid opposition to the oppressors. A landed aristocracy

* For his pamphlet on the security and bank stockholders in the early Congresses,
see above, p. 203.

344 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

built upon great estates would be more effective for this
purpose, but such is impossible and undesirable in the
United States. Consequently there is grave danger that
capitalism will triumph in time. Taylor thinks it is only a
question of years: "Though this landed interest may not
suddenly sink into an ignorant, scattered, disunited peasan-
try, taxed by paper operations, to enrich, instruct and
elevate a new species of feudal capitalists, yet the tendency
of the system is exactly to that point, and the arrival of an
unobstructed tendency is inevitable. If the division of
landed property has a tendency to increase the ignorance of
the numerous and valuable portion of society which cultivate
it, a defect of the American policy in not providing some
remedy to meet this evil is disclosed. From preventing an
accumulation of landed wealth, and providing for a monied
or stock monopoly of knowledge, a reason arises for placing
the best education within the reach of that great mass of
people, called the landed interest ; instead of which its
inability to purchase knowledge is studiously increased, by
a division of inheritances, and by the annual draughts upon
it for the interest and dividends of debt and bank stock.
The ignorance of land holders will thus in time be brought
to a standard exactly sufficient to render them tame, and
subservient to the interest of a stock aristocracy ; an event
which may even be accelerated, by taxing them for the
purpose of diffusing a knowledge of the vulgar tongue and
vulgar arithmetic. These laws for dividing landed property,
and levelling landed knowledge, form a striking contrast
with those for accumulating stock wealth, and of course
stock knowledge. ... Is an accumulation of wealth and
knowledge by law in a few hands to be found in any receipt
for making a free republick [p. 263] ?"

(5) To this conflict between the agrarian and capitalistic

THE POLITICS OF AGRARIANISM 345

interests Taylor traces the origin of party divisions. He
erroneously represents Marshall as attributing the rise of
parties to the "intrigues of Mr. Jefferson, to French in-
fluence, and to other transitory and fluctuating causes," ^
and adds that if this opinion had been correct, parties would
have disappeared with the supposed causes. As a matter
of fact the parties sprang from the economic antagonism :
"Being in truth produced by the mass of property trans-
ferred by funding, banking and patronage, creating (to
borrow Mr. Hume's phrase) an aristocracy of interest, they
[political parties] yet exist, because these laws divided the
nation into a minority enriched, and a majority furnishing
the riches ; and two parties, seekers and defenders of wealth,
are an unavoidable consequence. All parties, however
loyal to principles at first, degenerate into aristocracies of
interest at last ; and unless a nation is capable of discerning
the point where integrity ends and fraud begins, popular
parties are among the surest modes of introducing an
aristocracy [p. 569]."

During the battle of the Republicans against Hamilton's
system, Taylor looked to his party to reheve the nation of
the paper incubus, but he has now (1811) apparently lost
faith in the willingness of that party to destroy the parasiti-
cal class against which it has waged war.^ "Individuals
and entire parties, to a vast extent, have loudly reprobated
and calmly defended this power ; and the folly or knavery
of those who first represented it as an usurpation dangerous
to free government, and afterwards seized upon it, ought to
be a memorial to nations against reposing an excessive de-
gree of confidence in parties or individuals ; in judges or
legislatures ; in governments or patriots. The history of

1 For Marshall's correct view, see above, p. 237.

*For Jefferson's use of the "fiscal squadron" for party purposes, see below,
p. 447.

346 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

man proves that all will often avail themselves of the prece-
dents established by their predecessors and reprobated by
themselves. Every precedent, however clearly demon-
strated to be unconstitutional and tending 'towards mon-
archy and an iron government ' by a party out of power, will
be held sacred by the same party in it ; and those who clearly
discerned the injustice and impolicy of enriching and
strengthening the federalists by bank or debt stock, at the
publick expense, will seldom refuse to receive a similar
sinecure. In short, a power in the individuals who compose
legislatures, to fish up wealth from the people, by nets of
their own weaving, whatever be the names of such nets, will
corrupt legislative, executive and judicial publick servants,
by whatever systems constituted [p. 304]."

The fact is, the Republican party has been captured by
the law-created special interests — paper stock, banking,
and protected capital engaged in manufacturing. "The
United States exhibit four parties, the republican, mo-
narchical, stock, and patronage. The two parties of princi-
ple, unsophisticated by the parties of separate interest, would
discuss with moderation, and decide with integrity ; but
the last two, accepted on both sides as recruits, by an ardor
for victory, though known to be allies who serve for plunder,
empoison them all by the contamination of an interest,
distinct from the publick ; and by all the animosities, aristoc-
racies of interest inspire. Aristocracy or separate interest
in our case, at present, takes refuge under the one and then
under the other of our parties, because it is not yet able to
stand alone ; but whilst it is fondling first one and then the
other of its nurses, it is sucking both into a consumption and
itself towards maturity [p. 568]."

While thus appearing to assume that two parties of pure
theoretical principles, monarchical and republican, would

THE POLITICS OF AGRARIANISM 347

exist were there no special interest, Taylor, at another point,
clearly identifies agrarianism with republicanism and the
paper interest with monarchical predilections. "The landed
interest of the United States, being indissolubly betrothed
to commerce, has been considered as so completely covering
the interests of the society, that it is used in several states
as a substratum of civil government [landed qualifications
on the suffrage] recognised as republican, by the guarantee
in the federal constitution. And where the range of suffrage
is wider, but attended either by a greater portion of bank
stock or executive patronage, the tendency towards mon-
archy or aristocracy is more visible, than where suffrage has
been in some degree limited to land, but attended with less
stock or patronage [p. 555]."

(6) In spite of all the difficulties and discouragements
confronting the American people, land is the real basis of
democracy, the only genuine and enduring basis. It alone
has no special, law-made privileges, and seeks no favors
from the government. It stands on an independent founda-
tion. " Land is not created by law ; therefore it is under no
apprehension of its death stroke from law. It does not sub-
sist upon other interests ; therefore it is not beset by an
host of enemies, whose vengeance it is conscious of deserving.
By the operation of laws adverse to its monopoly, it quickly
adjusts itself to the interest of a majority of the nation ;
thenceforward it is incapable of the avarice and injustice of a
factitious legal interest, because no temptation to seduce it
into either exists. To this point of improvement, a landed
interest will invariably be brought, by laws for dividing
lands ; nor can it be corrupted, except by laws which con-
fine lands to a minority [p. 260]."

Like most defenders of a class interest against the as-
saults of another class which they deem predatory, Taylor

S48 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

does not inquire too narrowly into the origins and rights of
private property in land. He repeatedly speaks of labor as
the true and natural distributor of wealth where unimpeded
by governmental intervention, but he can hardly regard
property in land as a "reward" justly distributed by nature
to labor. Neither does he bring under review the simple
exploitation of slave labor by the planters for whom he was
himself the special spokesman. "Governments were in-
stituted," he says, "to enable men to keep their property,
but in these evils days (and in fact quite commonly in his-
tory), they use pubhc powers to transfer property from the
owners to factitious, legally created special interest [p. 561]."

Under no circumstances should the government interfere
with the distribution of wealth. "No form of civil govern-
ment can be more fraudulent, expensive, and complicated
than one which distributes wealth and consequently power
by the act of the government itself [p. 244]. . . . Our
policy is founded upon the idea, that it is both wise and just,
to leave the distribution of property to industry and talents ;
that what they acquire is all their own, except what they
owe to society ; that they owe nothing to society except a
contribution equivalent to the necessities of government ;
that they owe nothing to monopoly or exclusive privilege
in any form ; and that whether they are despoiled by the
rage of a mob, or the laws of a separate interest, the genuine
sanction of private property is equally violated [p. 282]."

The landed interest, in addition to being the enduring
basis of democracy, is a true preservative of the rights of pri-
vate property against invasion by exploiting paper stock
interests and the levelling poor. "There are two modes,"
said Tajdor, "of invading private property; the first, by
which the poor plunder the rich, is sudden and violent ; the
second, by which the rich plunder the poor, slow and legal.

THE POLITICS OF AGRARIANISM 349

. . . Whether the law shall gradually transfer the property
of the many to the few, or insurrection shall rapidly divide
the property of the few among the many, it is equally an
invasion of private property, and equally contrary to our
constitutions. If equalizing and accumulating laws are
the same in principle, it is inconceivable how the same mind
should be able to detest the one, and approve the other.
Integrity is compelled to reject both and spurning at doc-
trines, calculated to incite the few to plunder the many,
or the many to plunder the few, leaves every man under the
strongest excitement to labor for his own and national
prosperity [p. 280]."

Taylor repudiates therefore the communistic principles of
Godwin with the same zeal that he attacks the special in-
terests. The very philosophy of communism, he traces to
the exploitation of the producers of real wealth by fictitious
interests. "To the indignation inspired by the fraudulent
legal modes for acquiring wealth, mankind are indebted
for the pernicious and impracticable idea of equalizing
property by law. This speculation has been considered
by philosophers, in contrast with its opposite. It seemed
to them more reasonable and just, that property should be
made equal, than unequal, by law. Destroy the alternative
by assailing both its branches with the benefits arising from
leaving property to be distributed by industry, and the
argument would assume a new aspect. It would be dis-
covered, that arts and sciences, peace and plenty, have
never been found disunited from metes and bounds [p. 563],"
Just how "labor" had "distributed" property in land
Taylor does not attempt to explain.

However, in a contest between wealth and the property-
less bent upon levelling all property rights, Taylor holds,
fraudulent and honest property will unite in common de-

350 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

fence. "Legal, factitious or fraudulent property, com-
prising every species resulting from direct and indirect
modes of accumulation by law, at the expense of others, has
been able in all civilized countries to unite itself with sub-
stantial, real or honest property, comprising accumulations
arising from fair and useful industry and talents. The
equalizing speculation, by proposing to destroy both,
united these two opposite moral beings in a defensive war ;
just as a good and bad man would unite against an assassin,
indifferently determined to murder them both. Had
philosophers wisely avoided this snare and confined the
discussion to a discrimination between the useful and perni-
cious kinds of property, they would never have given to the
latter the benefit of an alliance by which it is sustained ;
and might have long since settled some definition of private
property, sufficiently perspicuous, to defend mankind against
the pecuniary oppressions that they are forever suffering
for the want of it. Instead of associating honest and
fraudulent property in one interest, by the chimerical and
impracticable equalizing project, they would have es-
tablished a rational and practicable distinction, between
that species of private property founded only in law, such
as is gained by privilege, hierarchy, paper, charter, and
sinecure; and that founded also in nature, arising from
industry, arts, and sciences [p. 564]."

(7) The agrarian interest being the only true basis of
democracy and the defender of the rights of private property
against exploiters and communists, it is in duty bound to de-
stroy that great enemy of the republic — the capitalistic
paper interest, root and branch, without compensation. Of
this remedy Taylor has no doubts. A landed aristocracy
can be destroyed by alienation and a capitalistic aristocracy
can be destroyed by the abolition of all special privileges.

THE POLITICS OF AGRARIANISM 351

It is therefore incumbent upon the agrarian democracy of
America to fall upon its great enemy without mercy, re-
membering that "all societies have exercised the right of
abolishing privileged, stipendiary, or factitious property,
whenever they become detrimental to them ; nor have
kings, churches, or aristocracies ever hesitated to do the
same thing, for the same reason. The king of England
joined the people and judges, in abolishing the tenures and
perpetuities of the nobles; the king and nobles united in
abolishing the property of the popish clergy ; the consistory
of Rome suppressed the order of Jesuits and disposed of its
property ; and several of these states have abolished entails,
tithes, and hierarchical establishments. What stronger
ground can be occupied by any species of law-begotten
wealth than by these [p. 562]?"

Taylor's system may be summed up in the following
manner :

1. The masses have always been exploited by ruling
classes, royal, ecclesiastical, or feudal, which have been
genuine economic castes sustaining their power by psycho-
logical devices such as "loyalty to the throne and altar."

2. Within recent times a new class, capitalistic in char-
acter, has sprung up, based on exploitation through inflated
public paper, bank stock, and a protective tariff, likewise
with its psychological devices, "public faith, national
integrity, and sacred credit."

3. In the United States, this class was built up by Ham-
ilton's fiscal system, the bank, and protective tariff, all of
which are schemes designed to filch wealth from productive
labor, particularly labor upon the land,

4. Thus was created a fundamental conflict between the
capitalistic and agrarian interests which was the origin of
parties in the United States.

352 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

5. Having no political principles, capitalism could fra-
ternize with any party that promised protection, and in
fact after the victory of the Republicans successfully in-
trenched itself in power under the new cover.

6. The only remedy is to follow the confiscatory examples
of other classes and destroy special privilege without com-
pensation.

CHAPTER XIII

THE GREAT BATTLE OF 1800

President Adams' systematic treatise on politics plagued
him throughout his administration.^ The Republicans
never wearied in referring to it as a work conceived in the
spirit of aristocracy and flatly contradictory to all American
doctrines and practices. It is true that he publicly an-
nounced himself as a believer in simplicity by saying in his
first inaugural address that robes and diamonds could add
nothing beyond ornament and decoration to the majesty of
a self-governing nation, and received a faint applause from
the Republicans for his democratic sentiments. But the
land was full of political trouble, and Adams was no man to
ride a popular storm successfully. He had a high sense of
honor and was conscious of it. He was austere and unbend-
ing and there was little in his career or bearing to attract
the enthusiasm of the populace. And it added nothing to
his good humor to reflect upon the bitter fact that he was
President "by three votes." From the day that he took
the oath of ofiice until the cold dawn of March 4, 1801, when
he hurried away from Washington to escape the hateful spec-
tacle of his rival's inauguration, Adams did not perform an
official act or make a public pronouncement that did any-
thing to conciliate permanently the opposition party, and
it may be justly said that he added to the unpopularity
with his own party from which he suffered in the beginning.

Moreover, the march of events at home and abroad did

I See The Aurora, September 12, 1800.
2 A 353

354 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

not contribute to Adams' ease of mind or to the happy
Vadministration of affairs. When Washington was gone,
the last restraint on party criticism was broken, and Fed-
erahst measures could be attacked without incurring the
odium of slurring the impeccable "Father of his Country."
And opportunity for criticism was not wanting. Adams
inherited an unfortunate legacy in the Jay treaty. Although
that agreement contained a declaration to the effect that it
should in no way conflict with the obligations of the United
States to France, the Federalists interpreted it in such a
fashion as to give umbrage to that country. In retaliation,
France began to prey upon American commerce. In the
closing weeks of Washington's administration, the Repub-
lican Monroe who had shown undue enthusiasm for the
revolutionary cause in France had been recalled from his
post as American representative to that country ; and the
French government, which was closely in touch with the
political situation in the United States through its keen-
sighted agents,^ refused to receive Monroe's successor, that
^Federalist of the old school, Charles Coatesworth Pinckney.
Then followed two years of anxious negotiation with
France, during which period the army and navy were greatly
increased, to the terror of all faithful Republicans, and
preparations were made for open war, with Washington and
Hamilton in command. Although the conduct of the French
government was in many ways disgusting even to the Repub-
licans, they insisted that the breach with a sister Republic
engaged in a death grapple with the recent foe of Ameri-
can liberty. Great Britain, was, in the main, due to Federal-
ist machinations, to Federalist sympathy with monarchical
institutions and fear of the revolutionary tendencies of
French republicanism. Whatever may have been the truth

> See above, p. 217.

THE GREAT BATTLE OF 1800 355

of the matter, and undoubtedly there was much to be said
in justification of the RepubHcan position, it is certain that
the whole affair with France augmented partisan feeling in
the country and gave support to the deep and inveterate
Republican suspicion that Federalism was allied with Brit-
ish commercial and financial interests — which was true,
though not in the sinister sense in which pamphleteers
took it.

Meanwhile the expenditures of the Federal government
mounted upwards, giving new cause for complaint on the
part of the "tax-burdened people." They were in round
numbers $5,800,000 in 1796, $6,000,000 in 1797, $7,600,000
in 1798, $9,300,000 in 1799, and $10,800,000 in 1800. The
national debt, instead of decreasing, was augmented by the
extraordinary military expenses ; and the war on the
stock-jobbers became more vociferous than ever. It was
not diminished when, by a law approved July 14, 1798, a
direct tax was laid upon houses, lands, and slaves, to meet
the increasing demands upon the federal revenue. Although
this law was made somewhat more palatable to the Repub-
lican members of Congress by placing a heavy progressive
tax on houses in cities, it was not received with satisfaction
by the Southern states, for in addition to the land tax,
Congress laid a tax of fifty cents on every slave between the
ages of twelve and fifty. ^

' See a letter of Gouverneur Morris to Rufus King, Morrisania, June 4, 1800.
After expressing the opinion that fear of their opponents would cause the Repub-
licans to use moderation in office, he said : "Truth is that a direct Tax, unpopular
everywhere, is really unwise in America, because property here is not productive.
Of course their Democrats and their demagogues have had just cause to complain
of the manner in which money is raised ; and our expenditure is so far from economi-
cal, that'no applause is to be expected on that score. But the thing which in my
opinion has done most mischief to the federal party is the ground given by some of
them to believe that they wish to establish a monarchy." Life and Correspondence
of Rufus King, Vol. Ill, p. 252. On January 26, 1797, Fisher Ames wrote to
Hamilton : " The anti-gents make their calculations no doubt that a direct tax
will sharpen popular feelings, augment clamors against the debt, bank, &c., enfeeble

356 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

V The Federalists then poured oil on the fire by passing in
the same year the famous Alien and Sedition Acts. The
first of these measures, directed against Frenchmen in the
United States, authorized the President to expel from the
country aUens whom he deemed dangerous to public peace
and safety. The second measure, approved on July 14,
the same day as the direct tax lawj-^was designed to facilitate

i the suppression of Kepubhcans who attacked the adminis-
tration in public print. It made liable to fine and imprison-
ment any one who counselled or attempted rioting or insur-
rection against the authority of the United States or who
was guilty of issuing false, scandalous, or seditious writings
against the government of the United States, the President,
the Senate, or the House of Representatives. The federal
courts began at once to enforce the Sedition Act with

V evident enthusiasm.

These rash measures no doubt ahenated many Federahsts,
for even the reliable Marshall opposed both of them on
grounds of law and expediency. The Virginia and Kentucky
legislatures protested against them in their famous " Resolu-
tions." The protest of the latter state was drafted by
^ Jefferson and amounted in fact to a nulUfication of federal
law within the borders of that commonwealth. The phil-
osophical leader of the Republicans, John Taylor, even
went so far as to propose the dissolution of the union and
the formation of a southern confederacy, but the cautious

and discredit the other species of revenue, especially internal. . . . Our proceed-
ings smell of anarchy. We rest our hopes on foolish and fanatical grounds — on
the superior morals and self-supporting theories of our age and country — on human
nature being different from what it is and better here than anywhere else. . . .
Internal revenues demand systems and vigor. The collection must be watched and
enforced. We want officers, courts, habits of acquiescence in our country and the
principles in f^ongress would hardly begin to form any of these. The western
country scarcely calls itself dependent on the Union. France is ready to hold
Louisiana. The thread of connection is slender and that event I fear would break
it. Yet we disband regiments." Hamillon Mss., January 26, 1797.

THE GREAT BATTLE OF 1800 357

Jefferson shrank from such a violent measure. Nevertheless
it is easy to overestimate the disturbing influence of these
laws upon the country.^ Certainly their immediate effect
was not to diminish seriously the power of the Federalist
party as the elections of 1799 and the replies of the states to
the Kentucky and Virginia doctrines conclusively demon-
strate. It may, perhaps, be said, with some show of reason,
that they only served to strengthen the conviction of the
Republicans that an aristocracy of wealth was prepared to
go any length in fastening its rule upon the country.

It is true that if one takes the mass of materials in the
newspapers and pamphlets as reflecting the relative impor-
tance of the issues of the campaign of 1800, one may assign
to freedom of the press, Jefferson's irreligion, and the attacks
on the aristocrats the very first rank among the questions of
the day. But these matters, which were especially inviting
to verbosity, did not obscure the old economic problems
which had been at the centre of the political conflicts since
the days of the Philadelphia Convention. The Federalist
holder of public securities, investor in bank or industrial
stocks, manufacturer, or shipowner may have had some
misgivings about the expediency of a law which imposed a
fine on a Republican who wished that the wad of a cannon
fired to salute John Adams, President of the United States,
had hit that eminent gentleman in the broadest part of his
breeches,^ but there could be no doubt about the danger of
placing in power at Washington a man who was a known
enemy to the funding system, the bank, commerce, and
industry.

* See Professor F. M. Anderson's articles on the subject in the American His-
torical Review, Vol. V, especially p. 244.

* A Jerseyman by the name of Baldwin was fined for using this highly seditious
expression in public.

358 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Jefferson's views on fundamental economic questions

Ns/Were not matters of speculation. In his Notes on Virginia
he had denounced the arts of the merchant and the financier,
and declared the landowning farmer to be the only true
hope of a republic. He had made it plain that the methods
of capitahsm were not only highly objectionable to him
personally, but that, in his opinion, an extensive develop-
i ment of them was incompatible with the perpetuity of
American institutions.^ In his letter to Mazzei, made
pubhc before the campaign of 1800 in a somewhat garbled
form, Jefferson had, in effect, declared the battle to be

•" between agrarianism and capitahsm, by placing on his
side the whole landed interest, and on the FederaHst side
''British merchants and Americans trading on British
capital, speculators and holders in banks and public funds,
Va contrivance invented for the purpose of corruption."
The clew to the campaign thus furnished by the leader
was taken up by his partisans, who exhausted every imple-
ment their ingenuity could devise in making the fiscal
pohcies of the Federal administration odious and even
treasonable in the minds of the people from New Hamp-
shire to Georgia.

^ The contest over economic issues, the ahgnment of
agrarian mass against the capitalistic class, which Jefferson
and his followers dehberately made, was likewise accepted
by the leading Federahsts as fundamental. Even in the
smaller and also the more completely agrarian states the

^ economic note was sounded in the campaign. The Ver-
mont Republicans smote the speculators hip and thigh ; ^
the New Jersey Republicans fell upon the fiscal party
which had long fattened upon the public treasury, and

« Below, pp. 422 fif.

« Vermont Gazette, quoted in The Aurora, August 27, 1800.

THE GREAT BATTLE OF 1800 359

sought security in nominating farmers for the House of
Representatives ; ^ Delaware Repubhcans placed direct
taxes, heaving imposts, an army and navy in time of peace,
and "a variety of stock-jobbing acts which have given
birth to a system of speculation, fraud, and bankruptcy"
among the issues of the hour ; ^ and in Virginia, where
there were no large centres of capitalism, the dwindling
Federalists sought to close their ranks by making Jefferson's
letter to Mazzei the crucial document of the campaign and
by giving the voters a choice between Washington's system
and a sail on 'Hhe boisterous sea of liberty." ^

In the larger states which had important financial and
commercial towns, Massachusetts, Connecticut, New York,
Pennsylvania, and South Carolina, the economic character
of the antagonism between agrarianism and capitalism was
naturally more pronounced, more definite, and more pre-
cisely avowed. Blows called forth blows ; as the campaign
proceeded the smoke of the battle lifted and revealed more
clearly than in other states the ranks of the two great con-
tending classes with their numerous camp followers. In
Massachusetts, the spirit of the fray was accurately re-
flected in two papers by " Decius " published in the Columbia
Centinel. It would be easy to gather a cloud of witnesses,
but the words of Decius are so terse, so eloquent, and so
direct that they call for nothing in addition by way of
illustration. After an examination of Jefferson's doctrines,
he says: "If he [Jefferson] had been personally a friend to
the funding system, without which public credit cannot be
supported, still it would be impossible for him or any other
man to withstand the torrent of prejudice, which his party

» The Aurora, October 4, 1800, and December 17, 1800. See also the address of
the "Federal" Republicans in the Connecticut Courant, November 24, 1800.

2 Wilmington Mirror, quoted in The Aurora, September 22, 1800.

3 Connecticut Courant, June 16, 1800.

360 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

feel on this subject. — The sagacious Jacobins have so
long and so perpetually labored to excite false and un-
founded objections and opposition to the funding system,
that the more ignorant of their party have finally believed
them sincere and accordingly entertained a cordial hatred
for the whole system of pubUc credit. — In Virginia more
particularly from whence Mr. Jefferson's support will be
principally derived, there are certain other causes which
will and have contributed to render this system more odious,
— they possess Uttle or no part of the pubUc debt —
they feel jealous and envious of their brethren in the East-
ern states, who with more oeconomy and foresight have
possessed themselves of their full share of it. . . . To
satisfy the clamours of the multitude who have been taught
to consider the reign of Jefferson as a Jubilee which was
to free them from all tithes and taxes, Mr. Jefferson, if he
valued pubHc credit, would be compelled to favor its ex-
tinction. But Mr. Jefferson is himself the most deadly
foe to the system itself and of course his interest and his
feehngs will happily coincide. . . . Tremble then in case
of Jefferson's election, all ye holders of public funds, for
your ruin is at hand. Old men who have retired to spend
the evening of life upon the fruits of the industry of their
youth. Widows and orphans with their scanty pittances.
PubUc banks, insurance companies, literary and charitable
institutions, who confiding in the admirable principles laid
down by Hamilton and adopted by Congress, and in the
solemn pledges of the national honor and property, have
invested their moneys in the public debt, will be involved
in one common, certain, and not very distant ruin. . . .
I believe that he [Jefferson] was sincere in his hatred of
the funding system and that he will do everything in his
power to overthrow it. — I believe it because he has ex-

THE GREAT BATTLE OF 1800 361

pressed it confidentially to his friend Mazzei ^ — because
Virginians possess but little or nothing of the public debt
— because Jefferson possesses none of it." ^

In a later paper, "Decius" adds to his objections to
Jefferson: "His contempt for commerce and commercial
men — and his despicable opinion of the morals and prin-
ciples of mechanics,^ and his attachment to foreign manu-
factures — and to foreign carrying trade. . . . His rooted
antipathy to the Federal Constitution and his fixed deter-
mination to overthrow it. . . . The ruinous effects upon
our external relations, by uniting us in a close connection
with France and involving us in a war with Great Britain." *
• In the state of Connecticut, where was a large number of
embryo capitalists and commerce and manufacturing were
making vigorous beginnings, Jefferson's champion, Abraham
Bishop, challenged the new order and demanded a return
to agriculture as the main stay of a Republican government.^
He attacked the funding system as the basis of the ''Aris-
tocracy," and he made a special point of assailing commerce
as a burden upon the farmers, compelling them to support
a defensive navy for the benefit of ship owners and builders
when foreign carriers would be glad to compete for the
carrying trade and assume the heavy burden of protecting
it by battle ships. Bishop's doctrines were set forth in an
oration delivered at New Haven and were spread abroad in
pamphlet form.^

The challenge of the agrarian was at once taken up by

» See below, p. 430.

' "Decius" in the Columbian Centinel, August 27, 1800.

• See below, p. 425.

• Columbian Centinel (Boston), September 20, 1800.

• See his Connecticut Republicanism (1800).

• Jefferson rewarded Bishop with a public office, and the Federalists in New
Havun set up "a hideous Bawling" on account of it. Jefferson Mss., 2d Series,
Vol. XXXII. No. 24.

362 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Connecticut Federalists/ and a keen pamphleteer replied
to Bishop in a tract bearing the title, A Rod for a FooVs
Back. The author of this work was highly wrought up over
Bishop's attack on commerce: "One of the most daring
as well as most pernicious opinions which our Democrats
have ventured to broach and defend ... is that commerce
is a great public evil — that it costs more to defend it than
it is worth, that if we will sell or burn our ships, turn all our
seamen, ship-builders, rope makers and riggers out of their
employment, and let trade take care of itself, then foreigners
will come and purchase our produce at our doors, and give
us more than we can get in foreign markets ; in which case
we avoid the expense of a navy. ... To inculcate this
doctrine, to make trade odious to the people, to discourage
our seamen, and to ruin the persons who are in trade or
are in any way connected with it is a principal object of
Mr. Bishop in his Oration.

"To preach such a doctrine in a town which depends
mostly on commerce for its support ; and which, at this
moment, is growing rich and flourishing by commerce, re-
quires more than common affrontery. ... If the multi-
tudes of industrious seamen and mechanics who derive their
subsistence from trade were not better citizens and less
disposed to sedition and riots than the preacher of such
heresies, he could not escape a coat of tar and feathers. . . .
The Chinese policy is recommended by the Democrats as
a model for us ! A most unfortunate model ! The Chinese
are subject to the most severe despotism now on the
globe ! . . . Commerce has not only civilized but en-

* For democracy as a scheme for pillaging the "earnings of the honest and indus-
trious for the purpose of enriching the prodigal, the pickpocket, and the dema-
gogue," see the Connecticut Courant, October 20, 1800. See "Burleigh's" series
in the Courant (beginning June 20, 1800), in which the Jeffersonians are denounced
as enemies of the Constitution, the funding system, the bank, and direct taxes.

THE GREAT BATTLE OF 1800 363

franchised the most of Europe — it is the parent of civiliza-
tion and humanity as well as wealth. . . . Commerce first
shook off the shackles of slavery [in Europe]. . . . This is
an indubitable truth — That commerce is the friend of
freedom and to that we are greatly indebted for the free-
dom of our country."

In reply to Bishop's charges that the funding system had
enriched a few, the author of A Rod for a Fool's Back, de-
clared that the public debt was widely distributed in Connecti-
cut: "A few men and a very few indeed made fortunes
by speculation. — It happens that I know the facts on
this point. I was Notary Public in Hartford at the time
of the funding of the debts and the great speculations and
most of the transfers of stock were made through my hands.
I know that much the greatest part of the certificates of
this state were funded in the hands of the original holders,
most of whom were the farmers of the country, who thus
received the real value of their honest debts. Some of
them sold their funded stock at twenty-four shillings on the
pound — others sold at par — and many yet hold their
stock — and the funding of the debt has thus been a prin-
cipal means of enriching our farmers." ^

Without venturing into the troublesome question of a
possible economic interpretation of theological biases, it
is interesting to note also that the^ clergy of New England,
in the main, saw eye to eye with the wealthy occupants of
the pews, in the matter of Jefferson's candidature, and
fortunately for them his liberal views on Christianity offered
them abundant opportunities to attack him on religious
grounds. ~lii~'many places, the clergymen were closely
related to the dominant commercial and trading families.
They were frequently sons of wealthy men or connected

* The Connecticut Courant, Septeniber 22, 1800. See above, p. 183.

364 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

with wealthy famiHes through ties of marriage. An in-
teresting illustration of this interrelation of the clergy with
pohtics is afforded by the following "Family Compact of
Connecticut," compiled by some loyal follower of Jeffer-
son and given to the public through the party press :

The Family Compact of Connecticut

1. Dr. Timothy Dwight, President of Yale, generally known
as the Pope.

2. James Hillhouse, United States Senator. He and Dwight
married sisters.

3. Theodore Dwight, Candidate for Congress. A brother to
the Pope.

4. Mr. Morris, the extraordinary chairman of Sedgwick in
Congress. Married Pope Dwight's sister.

5. Mr. Hosmer, Member of Congress. Related to Hillhouse by
marriage.

6. Chauncy Goodrich, member of Congress. Married Oliver
Wolcott's sister.

7. OUver Walcott, Secretary of Treasury.

8. Elizur Goodrich, brother of Chauncy.

9. Long John Allen, brother-in-law of Elizur Goodrich.

10. Mr. Austin, Collector of Customs at New Haven, is the
step-father of Long John Allen.

11. Son of Gov. Trumbull married the daughter of

12. Jeremiah Wadsworth.

13. Roger Griswold, Candidate for Congress, a cousin of
Hillhouse.

Dr. Dwight dictates the policy and prayers of the lUuminati ;
Mr. Hillhouse holds the purse, as Treasurer.^

While the rude language of The Aurora jarred on the
nerves of persons. with refined tastes, the contention of that
paper that Connecticut was ruled by a small, compact
group was sustained by a no less competent observer of
New England politics, than President Adams. In a review

» The Aurora, September 12, 1800.

THE GREAT BATTLE OF 1800 365

of some propositions advanced by Hillhouse for amending
the Constitution, Adams declared : "The state of Connecti-
cut has always been governed by an aristocracy, more
decisively than the empire of Great Britain is. Half a
dozen, or, at most a dozen families, have controlled that
country when a colony, as well as since it has been a
state. . . . Mr. Hillhouse says, Hhe United States do not
possess the materials for forming an aristocracy.' But
we do possess one material which actually constitutes an
aristocracy that governs the nation. That material is
wealth." ^ Hartford and New Haven were centres of
considerable capital in Connecticut ; the families which
The Aurora enumerates were, most of them at least, note-
worthy holders of public funds ; ^ and the clerical members
of those families were convinced that Jefferson's theology
and economics were equally unsound.

At Yale, the Reverend Timothy Dwight, president of
the college, was thundering away at the atheists and blas-
phemers who were undermining the foundations of Chris-
tian morals and "good" government by insidious philo-
sophical speculations ; ^ and in his Fourth of July orations
he was skilfully attacking the Jeffersonian party by de-
picting the horrors that befell those who went the way
of the illuminati, the philosophers, the atheists, and the
deists. "For what end," he exclaimed, "shall we be con-
nected with men of whom this is the character and the
conduct? Is it that we may assume the same character
and pursue the same conduct ? Is it that our churches may
become temples of reason, our Sabbath a decade, and our

» C. F. Adama, Works of John Adams, Vol. VI, p. 530.

'Loan OflSce Records (Connecticut), Treasury Department, Washington, D.C.

* See The Nature and Danger of Infidel Philosophy Exhibited in Two Discourses
Addressed to the Candidates for the Baccalaureate in Yale College, September 9,
1797. New York Public Library.

366 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

' lalms of praise Marseillais hymns? Is it that we may
change our holy worship into a dance of Jacobin phrenzy
and that we may behold a strumphet personating a God-
dess on the altars of Jehovah ? Is it that we may see the
Bible cast into a bonfire, the vessels of the sacramental
Bupper borne by an ass in public procession, and our chil-
dren, either wheedled or terrified, uniting in chanting
mockeries against God, and hailing in the sounds of 9a
ira, the ruin of their religion and the loss of their souls?
Is it that we may see our wives and daughters the victims
of legal prostitution ; soberly dishonoured ; speciously
polluted ; the outcasts of delicacy and virtue, the loathing
of God and man? . . . Shall we, my brethren, become
partakers of these sins? Shall we introduce them into
our government, our schools, our families? Shall our sons
become the disciples of Voltaire, and the dragoons of Marat ;
or our daughters the concubines of the Illuminati?" ^
In New York, the months preceding the election of
11^' /Jefferson were filled with hot contests between the Fed-

A"^

feralists and Republicans. And pertinently enough Hamil-
ton, the champion of the Constitution when its adoption
was pending, led the Federalists against George Clinton,
the astute manager of those who had sought to defeat
the ratification of the new instrument of government.
This time victory was with Chnton. Adams had alienated
many Federalists and Hamilton had alienated many more,
but in the main it was the old battle between the financial
and commercial interests against agrarianism and the
propertyless. Such at least is the view which many private
letters and newspaper reports give us, and it is supported
by some important detailed election figures.^

' Duly of Americans, at the Present Crisis, IlluMrated in a Discourse, Preached
on the Fourth of July. 1798 . . . at the Request of the Citizens of Nno Haven. New
York Public Library. * Below, pp. 383 fif.

THE GREAT BATTLE OF 1800 367

In a letter to Rufus King, Robert Troup said of the elec"1
tion of 1799 in New York City : "The election was the most
animated I have ever experienced. All men of property
stood forth and appeared to act as if they were persuaded
that everything valuable in society depended upon the
success of their efforts. The merchants in particular were
zealous and active. . . . We have broken the democratic
fetters with which we have been bound." ^ That the '
merG*hants and men of property were fully as active in the
city during the contest of the next year is clearly evident
from the maps of the elections published below (p. 385).

In the rural districts, the Republicans seem to have been
equally busy enrolling the farmers under the banner of
agrarianism. An up-state writer frankly avowed that
Jefferson was the friend of the farmers and the^enemy of
the financiers. This partisan publicist, after quoting
from Jefferson's works to show that he was no atheist and
calling attention to various passages in the Notes on Vir-
ginia, declared of the party leader: "He has on all oc-
casions shown himself the friend and patron of agriculture.
You then whose lives are devoted to agricultural pursuits
cannot surely approve of those who unjustly asperse his
well-earned reputation. Hear him on the subject which
must be nearest to your hearts, since it is most intimately
connected with your interests." Here the writer quotes
at length from the Notes on Virginia the passages to the
effect that those who labor in the earth are God's chosen
people and the mercantile and laboring element of the
towns the measure of a nation's decay. ^ To this the writer
adds: "Such is the language of Mr. Jefferson, but such
is not the language of his political enemies, — of that

• Life and Correspondence of Rufus King, Vol. Ill, p. 14.

* See below, p. 426.

368 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

mushroom race of speculators who have acquired wealth
without the exercise of industry and have risen into political
preeminence without possessing a single spark of that public
virtue which alone should entitle men to preeminence in
a free government. These men immersed in luxury and
debauchery, think only of gratifying their avarice and
ambition at the expense of the honest and industrious
farmer : — paltry and imperious upstarts ; the mere muck
worm of corruption, they look upon you as totally in-
capable of comprehending what is right or wrong in the
administration of your government." ^ In commending
their candidate for Congress, the Republicans of the ninth
district declared: "He is a respectable farmer; the in-
habitants of the 9th district are composed of cultivators
of the soil ; did not but practical farmers represent the
agricultural interest throughout the union, we should not
be burdened with an intolerable load of taxes." "^

In view of such clear-cut declarations on the part of the
Republicans in New York, it is small wonder that Jeffer-
son's alignment of the agrarian masses against the large
capitalistic interests was more than once made the text of
a Federalist argument. "Marcellus" in the New York
Spectator of April 26, 1800, dealt specifically with Jeffer-
son's letter to Mazzei and declared that with the election
of Jefferson and the ousting of the FederaHsts, "the whole
system of finance will tumble into ruin at a stroke. The
funding system has ever been the subject of the loudest
clamours among the Jacobins. When they have the
power, will they not subvert it? They commonly use all
the powers they possess for the purpose of mischief. . . .
When the funding system is annihilated, what becomes of
our national debt? The interest will be unpaid and the

» The Albany Register. April 8, 1800. » Ihid., April 18, 1800.

THE GREAT BATTLE OF 1800 369

value of the stock destroyed. The consequence of this
will be the foulest breach of national faith, and wide-spread
misery and beggary to the proprietors." Furthermore,
urged Marcellus, commerce will be ruined with the decline
of the navy, and high wages in the towns will come down
with the destruction of commerce.

It is certain that the New York Federalists were desper-
ately frightened at the prospects of an agrarian President.
So deep seated was their conviction that the Republican
victory meant disaster to the capitalistic interests that
Hamilton proposed, as a last resort, an ingenious plan
for regaining the lost battlefield, which even his ardent
eulogist, Mr. Lodge, thought unworthy of the great states-
man.-^ As is pointed out below, under the law then pre-
vailing, presidential electors were chosen in New York
by the state legislature and such was the requirement when
the elections for members of the legislature were held in
May, 1800. Five days after the election of the new legis-
lature, that is, on May 7, 1800, Hamilton wrote to Governor
John Jay informing him of the probable victory of the
Republicans and proposing the calling of the old legisla-
ture for the purpose of providing for the choice of presi-
dential electors in districts by popular vote. Hamilton's

1 How far Hamilton should be held personally responsible for this proposal is
a matter for conjecture, because it was evidently agreed to in a party caucus. The
scheme was soon made public through the Republican press. For example, The
Aurora of May 7, 1800, reported : "Their despondency approaches to the melan-
choly of despair; at a party meeting last night, it was suggested that Mr. Jay
shoiild immediately call the old legislature of this state together, and that they
should invest him with the power of chusing the electors of President and Vice-
President, in order to prevent the effects of the recent change in the people's minds
from taking effect. Whether this will be attempted by Mr. Jay or not is uncertain.
But when it was urged that it might lead to a civil war, if the obvious temper of
the public were opposed, a person present observed that a civil war would be pref-
erable to having Jefferson for President. This expression hurt one or two but
there were many more who warmly supported him and seemed to think a contest
at arms would be desirable." The Philadelphia Aurora, May 7, 1800.

370 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

letter containing this plan is such a remarkable and in-
forming document that it deserves reproduction at length.
He said : "You have been informed of the loss of our elec-
tion in this city. It is also known that we have been un-
fortunate throughout Long Island and in Westchester.
According to the returns hitherto, it is too probable that
we lose our senators for this district. The moral certainty
therefore is, that there will be an anti-federal major-
ity in the ensuing Legislature ; and the very high prob-
ability is that this will bring Jefferson into the chief magis-
tracy, unless it be prevented by the measure which I shall
now submit to your consideration, namely, the immediate
calling together of the existing legislature. I am aware
that there are weighty objections to the measure, but the
reasons for it appear to me to outweigh the objections ;
and in times like these in which we live, it will not do to
be over-scrupulous. It is easy to sacrifice the substantial
interests of society hy a strict adherence to ordinary rules.
In observing this, I shall not be supposed to mean that
anything ought to be done which integrity would forbid,
but merely that the scruples of delicacy and propriety, as
relative to a common course of things, ought to yield to the
extraordinary nature of the crisis. They ought not to
hinder the taking of a legal and constitutional step to pre-
vent an atheist in religion, and a fanatic in politics from
getting possession of the helm of state. You, sir, know,
in a great degree, the anti-federal party ; but I fear you do
not know them as well as I do. It is a composition, in-
deed, of very incongruous materials ; but all tending to
mischief — some of them to the overthrow of the Gov-
ernment, by stripping it of its due energies ; others of
them, to a Revolution, after the manner of Bonaparte.
I speak from indubitable facts, not from conjectures and

THE GREAT BATTLE OF 1800 371

inferences. In proportion as the true character of the
party is understood, is the force of the considerations which
urge to every effort to disappoint it ; and it seems to me,
that there is a very solemn obHgation to employ the means
in our power. The calling of the Legislature will have for
its object the choosing of electors hy the people in districts;
this (as Pennsylvania will do nothing) will ensure a ma-
jority of votes in the United States for a Federal candidate.
The measure will not fail to be approved by all the federal
party ; while it will, no doubt, be condemned by the op-
posite. As to its intrinsic nature, it is justified by un-
equivocal reasons of public safety. The reasonable
part of the world will, I believe, approve it. They will
see it as a proceeding out of the common course, but war-
ranted by the particular nature of the crisis and the great
cause of social order. If done, the motive ought to be
frankly avowed. In your communication to the Legis-
lature they ought to be told that temporary circumstances
had rendered it probable that, without their interposition,
the executive authority of the general government would
be transferred to hands hostile to the system heretofore
pursued with so much success, and dangerous to the peace,
happiness, and order of the country ; that under this im-
pression, from facts convincing to your own mind, you had
thought it your duty to give the existing Legislature an
opportunity for deliberating whether it would not be proper
to interpose, and endeavor to prevent so great an evil by
referring the choice of electors to the people distributed
into districts. In weighing this suggestion you will doubt-
less bear in mind that popular governments must certainly
be overturned, and, while they endure, prove engines of
mischief, if one party will call to its aid all the resources
which vice can give, and if the other (however pressing

372 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

the emergency) confines itself within all the ordinary forms
of delicacy and decorum. The Legislature can be brought
together in three weeks, so that there will be full time for the
object; but none ought to be lost. Think well, my dear
sir, of this proposition — appreciate the extreme danger
of the crisis; and I am unusually mistaken in my view
of the matter, if you do not see it right and expedient to
adopt the measure." This remarkable letter met with
Jay's disapproval, for he merely indorsed it with the words :
"Proposing a measure for party purposes which it would
not become me to adopt." ^ This decisive stand on the
part of the Federalist governor put an end to Federahst
hopes in New York.

In Pennsylvania, the chief objects of RepubHcan attack
were the stock-jobbers, the aristocrats, the fiscal squadron,
and the artful financiers. Whoever wades through the files
of The Aurora will find such phrases repeated with tire-
some iteration. Adams was attacked for putting mer-
chants among his "simplemen," ^ and the "sagacious"
doctrines of Jefferson's letter to Mazzei were indorsed.^
In the country districts the farmers were rallied to battle
against "the fiscal crew." The Republicans of Bucks,
Chester, and Montgomery counties put in their bill of in-
dictment against the Federalists the heavy loans, the
funding system, "a mock insurrection," the excise ilaws,
the house and stamp taxes, the increase in the pubhc debt,
and the official robbery of the public coffers, and cited Jeffer-
son's letter to Mazzei with approval.* The Chester, Dela-
ware, Bucks, and Montgomery Republicans in presenting
their candidates for the state legislature and for Congress

« Hamilton, Works (Lodge ed.), Vol. VIII, pp. 649 ff.
» The Aurora, August 15, 1800.
*Ibid., August 23, 1800.
« Ibid., September 26, 1800.

THE GREAT BATTLE OF 1800 373

declared that "most of them are farmers, the occupation
of all others that leads most to virtue." ^ The Lancaster
Intelligencer portrayed the Federalists as old Tories, British
"agents, factors, riders, and partners of manufacturing and
commercial houses," military adventurers, and other patriots
who looked upon the public treasury as private booty.

Far to the South we catch the echoes of the same eco-
nomic conflict. That converted champion of Jeffersonian
Democracy, Charles Pinckney, who in the constitutional
Convention had wanted to establish a $50,000 property
qualification for President of the United States and suitable
amounts for other officers and who thought the people did
not have enough intelligence to elect even the House of Rep-
resentatives,^ appeared as the leader of the agrarian and
planting interests against the commercial and financial in-
terests. In a series of papers signed "A Republican"
which appeared in the Charleston City Gazette and Daily
Advertiser from August 28, 1800, to October 14, 1800,
he discussed every issue of the campaign : the alien and
sedition laws, the judiciary, the system of taxation, and the
personal claims of Jefferson to the office of President.^

In the sixteenth number of the Republican, Pinckney
analyzes the economic issues at stake in the contest and
brings out the conflict between the "monied" interest and
agriculture. In this number, also, he quiets any alarms
which the slave owners might have entertained on account
of Jefferson's academic views on slavery, by assuring them,
on Jefferson's authority, that they need fear no adverse
action in case Jefferson is elected.

In opening his sharp attack Pinckney declares that

1 Ibid., August 1 and 2, 1800.
* See above, p. 66.

' On October 12, 1800, Pinckney wrote to Jefiferson that he had circulated these
papers as widely as possible. American Historical Review, Vol. IV, p. 114.

374 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

the public debt had been increased $10,000,000 notwith-
standing all of the taxes which the Federal Government
had devised. The direct tax he brands as a scheme to
shift a large part of the burden to agriculture. "How
then does it happen," he continues, "that in laying a direct
tax, the whole of it is laid on lands and slaves only, and on
no other species of property? Why is the whole of it laid
on the agricultural interest and the land-holder? Are the
planters and land-holders obnoxious classes of citizens to
the government, that they are to bear these exclusive bur-
dens? Or, what have they done to draw down upon them
this penalty or punishment? For certainly, wherever one
class of citizens is taxed and obliged to raise contributions,
and all others excused, it operates both in the nature of a
punishment and a stigma ; it shows clearly that the gov-
ernment are least inclined to favor them, or even to pro-
tect their equal rights ; and proves that in this - country,
whenever extraordinary burdens are to be imposed, the
land-holders and planters are to bear them alone. . . . Our
government by this invidious distinction, has placed the
land-holder and the planter in an oppressive and degrad-
ing predicament. And what is this done for? Why,
clearly, to exempt all the monied interest, which is by far
the largest in the northern states and the greatest favorite
of the federal party, from bearing any share of the public
burdens, and throwing all direct taxes entirely upon the
landed and planting interests ; that if any man in a north-
ern state is worth half a million of stock or money at in-
terest, he shall not pay a shilling to a direct tax, while a
poor Virginia or Carolina planter, who owns a little land
and a few negroes, and perhaps owes for a part of them, is
obliged to contribute his share.

"For instance, that Mr. Adams, owning as he probably

THE GREAT BATTLE OF 1800 375

does, a large estate in stock, shall not pay for his stock a
shilling, while Mr. Jefferson, whose whole estate is in land and
negroes, will have to pay a heavy tax. And yet there are
men who will tell you Mr. Jefferson is an unsafe president
for you ; he, whose whole estate is exactly like that of your
own planters, who owns two hundred negroes himself, and
who, in order to remove all doubts upon the subject, has
explicitly authorized his friends to declare as his assertion :
'That the Constitution has not empowered the federal
legislature to touch in the remotest degree the question
respecting the condition or property of slaves in any of the
states, and that any attempt of that sort would be uncon-
stitutional and a usurpation of rights Congress do not
possess.'

"I shall not trouble you with any further remarks on the
direct tax ; it is so clear an oppression of our land holder
and planter, that I wish them to read the act with atten-
tion ; and, if, after this, they agree to support one of
the federal party, I shall suppose them to be content to
be more oppressed and degraded, and to bear heavier and
more unequal burdens, than I, at present, believe they
are." '

With the results of the campaign in which he took such a
conspicuous and vigorous part, Charles Pinckney had every
reason to be highly elated. In a series of letters to Jeffer-
son he recounted the experiences of the contest and in-
formed him of the satisfactory outcome, incidentally re-
vealing the economic causes of the party divisions. On
October 12, 1800, he wrote a long letter to Jefferson.^

' "A Republican," Charleston City Gazette and Daily Advertiser, October 3,
1800. The following foot-note occurs with this address : " It is confidently asserted,
that in North Carolina, so reprobate is this unequal direct tax," that the tax was
not collected before the election.

' These letters are in the American Historical Review, Vol. IV, pp. Ill fif.

376 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Concerning Republican prospects in the election that
would be held in South CaroHna in a few days for choice
of members of the next legislature (presidential electors
were chosen by the legislature in that state), he said : "The
influence of the officers of the Government and of the Banks
and of the British and Mercantile interest will be very
powerful in Charleston. I think we shall in the City as
usual lose 2/3rds of the representation, but the City has
generally not much influence at Columbia, our Country
RepubUcan interest has always been very strong, I have
no doubt will be so now. I have done everything to
strengthen it and mean to go to Columbia to be present
at the election of electors, the 24 numbers of The Re-
pubUcan which I have written have been sent to you, and
I trust you have received and approved them, they are
written in much moderation and have been circulated as
much as possible. Jo has the little RepubUcan Farmer I
shewed you in Philadelphia and which has been reprinted
in aU our Southern States. With these and my speeches on
Juries, Judges, Ross' BiU, the Intercourse Bill and the
Liberty of the Press, we have literally sprinkled Georgia
and No. Carolina /rom the mountains to the ocean^

Before maiUng his letter of October 12, Pinckney on Oc-
tober 16th and 17th added more, saying : "Since the within
was written we have had the election for Charleston, which
by dint of the Bank and federal interest, is reported by
the Managers to be against us 11 to 4 — that is the federal-
ists are reported to have 11 out of 15 the number for the
City representation. ... to shew you what has been the
Contest and the abuse I have been obUged to bear, I enclose
you some of the last days Publications. I suppose this un-
expected opposition to my Kinsman who has never been
opposed here before as member for the City, wiU sever and

THE GREAT BATTLE OF 1800 377

divide me from him and his Brother forever, for the federal-
ists all charge me with being the sole cause of any opposition
in this State, where all our intelligence from the country-
convinces me that we shall have a decided majority in our
Legislature, besides we mean to dispute the Election of
Charleston on the ground that many have Voted who had
no right and are not Citizens — I am told 200 — and that
a scrutiny is to be demanded. ... I left off yesterday
and now resume my pen. since this our accounts from the
Country are still more favorable, I expect to-morrow to
hear further and more favorably. I never before this
knew the full extent of the federal Interest connected with
the British and the aid of the Banks and the federal Treas-
ury, and all their officers, they have endeavored to shake
Republicanism in South Carolina to its foundations, but we
have resisted it firmly and I trust successfully. o\ir Coun-
try interest out of reach of Banks and Custom Houses and
federal officers is I think as pure as ever. I rejoice our
Legislature meets 130 or 40 miles from the Sea. as much
as I am accustomed to Politics and to study mankind this
Election in Charleston has opened to me a new view of
things, never certainly was such an Election in America,
we mean to contest it for 8 or 9 of the 15. it is said that
several Hundred more voted than paid taxes, the Lame,
Crippled, diseased and blind were either led, lifted or brought
in carriages to the Poll, the sacred right of ballot was
struck at, for at a late hour, when too late to counteract
it, in order to know how men, who were supposed to be
under the influence of Banks and federal officers and Eng-
lish Merchants, Voted, and that they might be watched
to know whether they Voted as they were directed, the
Novel and Unwarrantable measure was used of Voting with
tickets printed on Green and blue and red and yellow

378 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

paper and Men stationed to watch the votes." On October
26th, Pinckney added to this letter: "Our accounts re-
specting our State Legislature are every day more favor-
able, from those We have heard of We are sure now to
have a decided majority and We still have to hear from
other counties which have been always republican and
which in fact we consider our strong ground."

When the returns of the great election were all in it was
discovered that the Federalist candidates, Adams and
Pinckney, had sixty-five and sixty-four electoral votes
respectively, and that Jefferson and Burr had seventy-three
each and were tied, thus throwing the election in the House
of Representatives where the vote had to be taken by states
and the FederaHsts, under this arrangement, had a majority.
In several of the states, all the electors were chosen by the
legislature on a general ticket and the party divisions within
the state did not appear in the electoral vote. This was the
case in New Hampshire, Vermont, Connecticut, New York,
New Jersey, Delaware, Pennsylvania, and other states.^
Therefore, maps based upon the electoral vote of the several
states are practically worthless for an economic study of
the politics of the period. This is well illustrated in the
case of New York which appears on the political map as a
solid Republican State, whereas, as shown below, the heart
of New York City, the old Federalist stronghold, was as
loyal as ever to Federalism and the Constitution.^

Even the gross popular vote where the presidential electors
were chosen by ballot does not yield to an economic analy-
sis until broken into the smallest possible units. For ex-

' In only one of these states, Pennsylvania, was the electoral vote divided, and
that was due to the fact that the Federalists had a majority in the upper house of
the state legislature.

» Below, p. 383.

THE GREAT BATTLE OF 1800 379

ample, we find the most recalcitrant opponent of the Consti-
tution, Rhode Island, returning four Federalist electors with
apparent unanimity ; but an examination of the vote more
closely makes some startling revelations. Of the thirty
towns in that state, the Republicans carried eighteen in the
election of November 19, 1800, at which presidential electors
were chosen. If it had been a question of the ratification
of the Constitution by a state convention composed of
delegates from the towns on the rotten borough system of
apportionment which prevailed at that time, Rhode Island
would have rejected the Constitution in 1800 by an over-
whelming vote — that is, counting the Jeffersonian vote
against the Constitution. Rhode Island went Federalist
in 1800 because in one of the minority of twelve towns that
the party carried, — the commercial town of Providence,
which had even threatened to secede from the state and
join the Union some years before when ratification was
long delayed, — the Federalist majority was 456, a majority
sufficiently large to wipe out the majority of 164 with which
the Republicans rolled up to the gates of the city. The
Federalist majority in Providence more than counterbal-
anced the Republican majorities in fifteen of the eighteen
towns which they carried, that is. Little Compton, Tiverton,
Newport, Jamestown, Portsmouth, Warren, Smithfield,
Gloucester, Foster, Johnston, Cranston, Exeter, North
Kingston, Richmond, and Charlestown. The Federalist
majority in the whole state was only 292. The FederaHst
majorities in the three towns of Bristol, Coventry, and
Providence totalled 665 which more than offset the total
majority of 629 with which the Republicans carried the
eighteen towns that fell to their portion. In other words,
the former paper money regions were, for the most part,
loyal to their traditions and voted for the agrarian candi-

380 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

date, but the commercial and financial centre of Providence,
true to her traditions also, saved the day for John Adams. ^

The gross vote in Massachusetts in 1800 is particularly
misleading. According to the returns for the election of
governor in that year the Federalists were victorious, but it
was no overwhelming victory, for the vote stood 21,620 to
17,019. Curiously enough, the proportions were almost
those of the votes for and against the Constitution in the
state ratifying convention of 1788 — 187 to 168, But we
are informed that political sentiment taken by districts
seems to have been reversed and that Boston went Repub-
lican.^ This is true, but as has been pointed out, only if we
take the gross vote by large districts. Boston went Re-
publican in 1800 by a majority of twenty-four votes polled
by Gerry, the Anti-Federalist of 1788, who by a series of
most dextrous political somersaults had been elected to
Congress on a moderate platform in 1789, had voted for
Hamilton's fiscal system from which he derived large per-
sonal benefits, had voted for Adams for President in 1796,
accepted an appointment under him, and then ended as
an "ardent" Republican. But as has been shown, the total
vote in Boston in 1800 was about four times the vote on the
Constitution some twelve years before, and the population
had by no means doubled in the period. Until a narrower
analysis is made of the Boston vote of 1800 we may still
believe with Henry Adams that the "wealth and talents"
of the state were Federalist.

If we divide Massachusetts into three parts, the Maine
region, the east part, and the west part, we undoubtedly
find what appears to be reversal of the vote on the Consti-

• The election statistics here given are taken from The Aurora, Philadelphia,
December 4, 1800. The totals given there are corrected.
' See above, p. 31.

THE GREAT BATTLE OF 1800 381

tution. The Maine and western regions went Federalist
in the election of governor in 1800. An examination of the
figures shows, however, that the vote in the Maine district
was 3883 for the Federalist candidate and 3111 for the
Republican candidate ; in other words, that the old Anti-
Federalist district of 1788 went Federalist in 1800 by a
small margin. We do not know the popular vote of the
earlier period, but reasoning from similar conditions else-
where we may reasonably assume an enormous increase.
Though we must reverse the Republican and Federalist
colors on a political map, it may be that each party was
loyal to its traditions but that the augmentation of the '
forces of one party or the other was responsible for the
political change. If we take the western region, which was
Anti-Federalist by a considerable majority in 1788, we find
what appears to be a radical change in sentiment, but how
far this was a real change in personal opinions and how far
it was due to the rise of new forces we cannot tell. The
election figures are puzzling. The Republicans polled in
the gubernatorial election of 1800 in the west, 3226 votes,
but this was a loss of only twenty-five votes as against the
number polled in 1796, namely, 3251. While the Repub-
lican vote fluctuated greatly between 1796 and 1800, once
falling as low as 304 in this district, the Federalist vote
steadily increased without a single relapse from 4850 in
1796 to 9550 in 1800. It may very well be, therefore, that' \
the Republicans of 1787 remained loyal to their party, in the f
main, but that the Federalist victory was due to the rise oi
new forces. In the eastern district, the Republican candi-
date for governor, Gerry, polled 10,682 votes as against
8197 cast for Strong, the Federalist candidate. This was
an increase of about 6000 votes over the number polled in
1796 and how great an increase over the number cast in the

382 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

town elections of 1787 no one can ever tell. From 1796 to
1800 the Federalist vote rose steadily, except in 1799, when
owing to the extraordinary popularity of the Federalist
candidate for governor it made a leap to 11,000. The vote
in the eastern district in 1800 was larger by 6000 votes than
in 1796, and, if the figures of Boston are typical, three or
four times larger than the popular vote when delegates to
the state ratifying convention were chosen.^ It would be
a bold person, therefore, who would say in the face of the
gross returns that FederaHsts of 1787 had become Republicans
and that Anti-Federahsts of 1787 had become Federalists.
Before coming to statistical conclusions, we must await a
long and careful search into the minutiae of the election
returns for Massachusetts.

The gross vote in New York State would also seem to
show a reversal of the party division of 1788, but a close
examination of one small group of the election returns,
those for New York City, proves the utter unrehabihty of
general estimates ; and, as far as it goes, proves the Fed-
eraUst party to have derived its strength in 1800 from the
commercial and capitalistic interests. Fortunately, the
statistics of election in that city, by wards, have come down
to us and it is possible to discover from the tax rolls where
the people of wealth resided. It is true, that, at the time,
presidential electors were chosen by the state legislature,
and no direct vote was taken upon the merits of Adams and
Jefferson. Nevertheless, the election, on May 2, 1800, of the
members of the state legislature, who were to select the
presidential electors, was fought definitely on the momentous
question whether Adams or Jefferson should be President
and the issue at stake was fully understood by the leaders
and the voters.

> Figurea here from Morse, The Federalist Party in Maasaehuaetts, p. 179, note.

THE GREAT BATTLE OF 1800

383

Under the prevailing suffrage qualifications only free-
holders of property worth at least one hundred pounds
could vote for members of the state senate. In the elec-
tion to the senate on May 2, 1800, Haight, the Federalist
candidate standing highest on the list, received 1126 votes
in New York City and Denning, the Republican candidate
standing highest, received 877 votes, making a total of
2003 votes cast in the election. The Federalist was thus
victorious in the City proper, but he was unable to overcome
the heavy majority cast against him in the outlying rural
regions of the senatorial district. The votes of these two
highest candidates were distributed among the various
wards of the City as follows : ^

Ward

Haight

Denning

130

213

185

179

124

147

139

108

187

164

231

1126

877

In the election of assemblymen on the same day, at which
a wider suffrage prevailed,^ 5757 votes were cast for Furma,
the Federalist, and Clinton, the Republican — the candidates
standing highest on their respective tickets. This vote
was distributed among the wards of the City as follows :

* Figures from The New York Spectator, Saturday, May 10, 1800.

* In addition to freeholders and a few freemen, any person who rented a house
or tenement worth forty shillings a year could vote for assemblymen. Figures
from The New York Spectator, May 7, 1800.

384 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Ward

FUBMA

Clinton

245

172

434

200

438

250

330

412

370

458

363

814

485

786

2665

3092

6
y/,

These tables reveal many interesting aspects of contempo-
rary politics. They show, for example, how widespread was
the disfranchisement worked by the freehold qualifications
placed on voters for the state senate, for at least 3700 more
men participated in the election of assemblymen than in the
election of senators. They show also that the number of
voters who took part in the election of 1800 in the City alone
was twice the number that voted in the entire county of
New York in the election of delegates to the state conven-
tion which ratified the Federal constitution in 1788. In
other words, taking the increase of population into account,
a relatively larger percentage of the adult males took part
in the election of 1800 than in the election on the Constitu-
tion when no property qualification at all was placed on the
suffrage.^

From the point of view of an economic interpretation,
the figures, taken into connection with the distribution of
wealth in the City, are striking, indeed. The City of New
York had almost doubled in population between 1790 and
1800, but this growth did not add much to the congestion
of the lower end of the City because the additional popu-

Economic Interpretation, p. 244.

THE GREAT BATTLE OF 1800

385

UnU /federalist Wards

Map showing
Federalist and

Republican Vote by Wards in New York City
IN THE Election of State Assemblymen in 1800.

MU /"ederaUst iVafds

Map showing
Federalist and

Republican Vote in New York City by Wards
IN the Election op State Senators in 1800.

386 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

lation spread out into what are represented as the fifth,
sixth, and seventh wards on the maps (p. 385). The first,
second, third, and fourth wards were the districts in which
the most of the wealthy men of the city hved. This is not
a matter of conjecture for the assessment rolls, show that
practically all of the houses valued at £2000 and over were
on Pearl, Broad, Wliitehall, State, Wall, William, Front,
Water, Pine, Liberty, Beekman, John, and Cherry streets
and on Broadway, Sloat Lane, and Maiden Lane.^ An
examination of the map, illustrating the senatorial election,
shows that these streets were almost all confined to the
limits of the first four wards — the Federalist strongholds.
In those days, "there were no Mown town' and Mp town'
as we have since learned to understand these terms. The
attorney, the merchant, the shop keeper carried on their
business in the house that was their dwelling. . . . The
parts now devoted to business only, where homes, except
the humblest, are unknown, were then also the haunts of
business, but at the same time presented the more cheery
aspect of ordinary habitation and betrayed the dainty and
tidy touch of the house-wife. Wliile there were not many
shops on Broadway, in William, in Broad, in Wall Street
and others, offices, and stores and counting houses were
mingled in busy array." ^

An examination of the map shows that in the election of
state senators, when the higher property qualifications were
applied, the Federalists carried the first, second, third,
fourth, and fifth wards, that is, practically every street in
which the houses of the rich men of the City were located.
In the Wall Street region, appropriately enough, there were
only seventy-four Jeffersonians, while the Federalists polled

* Wilson, Memorial History of the City of New York, Vol. Ill, p. 150.
*Ibid., Vol. Ill, p. 148.

THE GREAT BATTLE OF 1800 387

213 votes. As we move outward into the districts inhabited
by laborers, carters, truck gardeners, and small folk gener-
ally, the Jeffersonian vote increases and the Federalist vote
diminishes.

The economic element appears in a still more startling
fashion when we examine the vote for assemblymen. In
that election, the freehold qualifications were not applied
and practically any man who had a settled habitation,
whether an owner or renter, could cast his ballot. In this
election, the JefTersonian element captured two more of the
upper wards from the Federalists, the fourth and fifth, and
greatly increased the proportion of their vote in the first,
second, and third wards. For example, the Jeffersonians
polled about one-third as many votes as the Federalists in
the Wall Street ward when the high property qualifications
were imposed and nearly one-half as many when the low
property qualifications were applied.

Of course, a perfect mathematical analysis would require
us to have the names and property holdings of all the voters
and to know their political views as well, but surely the
evidence here presented is conclusive as to the fact that the
"wealth and talents" of New York City, that is, the capital-
ists, merchants, financiers, brokers, shippers, and traders,
were against Jefferson and his party, and the poorer orders
were on his side. When an equally fine analysis is made of
the entire country, we may be able to answer decisively the
question as to the relation of the constitutional struggle to
the political conflict which followed. Meanwhile, it may
be safely guessed that the great bulk of those who sup-
ported the Constitution in 1788 in New York City voted
the Federalist ticket in 1800.

If we take the vote for members of the lower house of the
Pennsylvania legislature on October 14, 1800, we find quite

388 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

a contrast to the returns in Massachusetts. The Federahsts
elected five out of the six members from the old centre of
Federalism, Philadelphia ; and they carried the old Federal-
ist counties of Delaware, Chester, Lancaster, and Hunting-
ton. The Republicans, on the other hand, carried the old
Anti-Federalist regions embracing Alleghany, Washington,
Greene, Fayette, Westmoreland, Cumberland, Dauphin, and
Berks. ^^ Large areas of the Pennsylvania political map,
showing the elections of 1800, correspond exactly with the
respective Federalist and Anti-Federalist areas of 1787./'
However, the Repubhcans made many gains. In 1800 they
carried the regions which had been embraced in the Fed-
erahst counties (1787) of Northumberland, Luzerne, North-
ampton, Bucks, Montgomery, Mifflin, and a part of York.
The only Federalist gain appears to have been in the former
Anti-Federalist county of Bedford which had been divided.
In the election, the Republicans carried fifty-five seats in
the lower house and the Federalists twenty-two seats, but
the latter by virtue of their possession of the upper house
were able to secure seven of the fifteen presidential electors.
When we remember that only about 13,000 out of 70,000
voters took part in the elections of 1787 and that the Re-
publican majority in the congressional battle in 1800 was
18,230 ^ we recognize the difficulty of making comparisons
between the two elections ; but still it is evident that the
Anti-Federalists more than held their old ground and gained
at the expense of the Federalists. The overwhelming vic-
tory of the Republicans in 1800 makes us wonder whether
radically different results would not have occurred in 1787
if the Federalists had given their opponents ample time to
rouse the sleeping giants in the country districts against the
Constitution.^ One thing seems reasonably certain and

' The Aurora, November 17, 1800. • Economic Interpretation, pp. 231 fif.

THE GREAT BATTLE OF 1800 389

that is that very few Anti-Federalists of 1787 went over to
the Federalist party by 1800.

To the southward the gross election returns as measured
by the electoral vote were on the whole highly favorable to
the Republicans. Maryland alone was equally divided in
the popular election of presidential electors. The Repub-
licans carried the northwest district over against the Repub-
lican counties of Pennsylvania, and four of the northeastern
districts, including Baltimore and Annapolis. The Fed-
eralists carried their old areas around the city of Washington
and on both of the lower shores.^ Unlike New York,
Philadelphia, and Charleston, the city of Baltimore went
Republican by an overwhelming majority, the vote for the
Republican elector being 1497 and for the Federalist elector
438 or less than half the Federalist vote cast for the rati-
fication of the Constitution in 1788.^ The Federalists
carried only the third ward of Baltimore, between the east
side of Light Street and the west side of Calvert Street, a
strip right in the heart of the city.' The heaviest Jeffer-
sonian vote was in the seventh and eighth wards at Fell's
Point, a newer district of the city.

In Virginia, Jefferson secured every presidential elector.
In that state llie T^onititu^onliaH"~BFen-Tatified-w^
difficulty by a close vote — the popular vote very probably
being in the gross against it. The assumption of state debts
and the transference of nearly all the Virginia debt to specu-
lative purchasers, the excise tax, the Jay treaty, and finally
the tax on lands and slaves must have turned many Fed-
eralists to the Republican party, even if state pride and a
growing dislike for the commercially minded Yankees had

» The Aurora, December 4, 1800.

* Ibid., November 14, 1800. This is, of course, a Republican source.

* Scharf, Chronicles of Baltimore, p. 281 ; for a contemporary map see Records of
the City of Baltimore, 1797-1813, appendix.

390 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

not been sufficient to roll up Jefferson's majorities. But
when the tide was at its flood some vestiges of the old Fed-
eralist landmarks appeared above the surface. "Practically
complete returns," says Ambler, "gave Jefferson a majority
of 13,363 votes in a total of 20,797. Loudon and Augusta
were the only counties which gave majorities to Adams,
though several counties of the lower Tidewater and the
Shenandoah Valley gave him large minorities. The vote
in the eastern towns and cities was also almost evenly
divided." '

The one surprise of the South was North Carolina which
gave four of her twelve electoral votes to Adams. The
northern Jier joi-£i)unties went Republican readily, but it
seems that the districts in the southern part of the state
which had been Tory strongholds during the war of the
Revolution went, some of them quite heavily, for Adams.^
'fhe backwoods^western regions were Republican by a vote
of four to one, but on the southeastern coaSt-the Federahsts
made a very respectable showing. '

In South Carolina, the former lines marking the capital-
istic and agrarian interests remained, but the Republicans
made severe inroads upon the old Federalist areas.^ Not-
withstanding the Jay treaty, the tax on slaves, and the
protective measures in behalf of Northern trade and manu-
factures, the old friends of the Constitution in Charleston
stuck by their guns and returned Federalist members to
the state legislature that was to choose presidential electors.
However, the Republican gains in the country were too
heavy for them and the legislature selected a soHd delega-
tion of Republican presidential electors.

• Ambler, Seclionalism in Viroinia, p. 79.

> Data from the United States Gazette, Philadelphia, November 20 and Novem-
ber 28, 1800, and from The Aurora, December 1, 1800.

* American Hiatorical Review, Vol. IV, pp. Ill flf.

THE GREAT BATTLE OF 1800 391

Although the detailed researches have not yet been made
which warrant many broad generalizations as to the total
results of the elections of 1800, certain features of the vote
deserve consideration in relation to the conflict over the
Constitution in 1787-1788 and to the contending economic
interests of the period. Taking the gross electoral vote, it
will be discovered that, with the exception of divided North
Carolina (eight for Jefferson and four for Adams), the entire
South below Maryland was Republican. On the other
hand. New England, Delaware, and New Jersey were solidly
Federahst ; Pennsylvania and Maryland were divided, and
New York was the only solid Republican state north of the
Potomac. This is, in the main, the division which Madison
noted when, on July 14, 1787, he remarked in the constitu-
tional convention : "It seems now to be pretty well under-
stood that the real difference of interests lay, not between
the large and small, but between the Northern and Southern
states. The institution of slavery and its consequences
formed the line of discrimination." ^

Although Madison is correct in locating the commercial V
interests in the North and the agricultural interest in the
South, this does not mean that there were no commercial
interests in the South or no vocal agrarian interests in the
North. Nevertheless, the dominant class in New England,
dominant by virtue of its wealth, its consciously developed
solidarity of interest, and its cultural cohesion, was un- \
doubtedly the mercantile and financial group. The pre-
dominance of this class was further strengthened by the
thrifty farmers near the seashore who frequently had money
invested in the public funds or were concerned in minor
shipping ventures and by small manufacturers who began'))
their tiny enterprises in little villages scattered throughout'/

> Farrand, Records, Vol. II, p. 10.

392 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

the rural districts. As Hildreth remarked long ago: "In
the division of parties which took place on the question of

V the funding system and the general pohcy of the new federal
government, the lawyers, the clergy, the merchants and
capitalists, the great land holders in the Middle States, al-
most all the educated and intelligent men of the North,

V united quite generally in favor of Hamilton's measures." ^
The funded debt and the control of the United States
bank had largely centraUzed in the Northern states by
1795. Take, for example, the bank directors elected on
October 21, 1791. Thomas Wilhng, Robert Morris' partner
in Philadelphia, was made President, and James Watson,
Philip Livingston, Rufus King, Nicholas Low, Joseph An-
thony, Herman Le Roy, Jonathan Mason, Jr., Jeremiah
Wadsworth, John Lawrence, Joseph Barrill, John Watts,
Joseph Ball, William Bingham, James Cole Fisher, Robert
Smith, Archibald M'Call, Charles Carroll, Charles Pettit,
John M. Nesbit, George Cabot, Fisher Ames, James McClurg,
Samuel Johnston, and WilHam Smith were named directors.
All of the prominent men whose views are known to us were
Federahsts. Practically all are from the North. McClurg,
from Virginia, Samuel Johnston, from North Carolina, and
William Smith, from South Carolina, constituted the
Southern contingent.^ In the second election of bank
directors, January 3, 1792, only two men from south of the
Potomac were chosen, two Federalist politicians, William
Smith, of South CaroUna, and Samuel Johnston, of North
Carolina.'

In the distribution of the holdings of pubUc debt there was
likewise a remarkable concentration in the Northern states,
particularly, the cities. The speculators from the North,

» History of the United Slates, Vol. IV, p. 348.
* Danlap's Daily Advertiser, October 23, 1791.
» Gazette of the United States, January 7, 1792.

THE GREAT BATTLE OF 1800 393

where the seat of the government was located during the
funding process, almost stripped the South of its paper at a
low figure, because they had "inside" information. The
four New England states, New Hampshire, Massachusetts,
Connecticut, and Rhode Island, received $440,800 in the
interest and capital disbursements on the public debt in
1795 out of a total national disbursement of $1,180,909.19
in that year. Massachusetts alone received in interest on
the funds one-third more than did all of the Southern states :
Maryland, Virginia, North Carolina, South Carolina, and
Georgia.^ The thrifty Yankees of Connecticut held more
of the public debt than all the creditors in Virginia, North
Carolina, and Georgia. The only large holdings were in
South Carolina and they were concentrated in the city of
Charleston where Federalism held out vigorously long after
the other Southern states had gone hopelessly over to Repub-
licanism. The only Northern state with holdings com-
parable to those of Massachusetts was New York, which
appears Republican on the national political map of 1800,
but an examination of the Treasury Records for that state
reveals a heavy concentration in New York City and Albany,
where Federalism was most strongly intrenched.^

The student who fixes his eye on the solid color which
represents New England as Federal must remember that in
spite of the great strength and organization of the com-
mercial and fiscal interests. New England, in 1800, even as in
1787, was sharply divided against itself. In Connecticut,
alone, where the public security holdings and small industries
were perhaps most widely distributed, were the Federalists
without formidable opposition. New Hampshire had to
be driven into ratifying the Constitution by skilful ma-

' Economic Interpretation, p. 36.

* See the Loan Office Books in the Treasury Department at Washington, D.C.

394 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

ncBUvring, and in 1800 the Vermont region of that state
sent to Congress a RepubHcan Representative, Israel Smith,
formerly of the old Anti-Federalist town of Suflield, Con-
necticut. The vote on the ratification of the Constitution
had been close in Massachusetts in 1788, and the vote in
the campaign of 1800 was divided almost in the same propor-
tions. From the rebellious western region of Stockbridge,
the Republicans sent as Representative, John Bacon, a
Princeton graduate who had been driven out of the old South
Church in Boston for "diversity of opinion." From Bristol
County the Republicans sent Captain Phanuel Bishop, a
former Shays adherent, who had worked and voted against
the ratification of the Constitution in the Massachusetts
convention of 1788. Bishop had as a colleague in the House
of Representatives, Richard Cutts, who had stood shoulder
to shoulder with him in the fight in the convention against
the Constitution. Three other Republicans found their
way into the House of Representatives that greeted Jefferson,
Eustis, Josiah Smith, and Joseph Varnum, the last two
having been Federalist members of the state convention
who renounced their former allegiance. Thus Massa-
chusetts was divided in 1800.

Connecticut, as has been remarked, doubtless on account
of the wide distribution of capitalistic interests noted, was
solidly Federalist in its delegation to the House. Rhode
Island sent one Republican Representative. All of the New
York electors were Republican in 1800 and the entire delega-
tion in the House was of the same party. In view of the
attitude of that state in the ratification contest of 1788, this
*is significant, for the popular vote in that year had been over-
whelmingly against the Constitution, the Federalists carry-
ing only the regions about New York City. In 1800, the
Federalists retained their strength in New York and Albany,

THE GREAT BATTLE OF 1800 395

but the growth of Republicanism, added to Anti-Federalism,
was too great for them to overcome.

The New Jersey electors were Federalist, but the dele-
gation in the House was composed of farmers, according
to The Aurora for December 17, 1800, and was appropri-
ately enough solidly Republican. New Jersey had ratified
the Constitution unanimously. Delaware, where the rati-
fication had likewise been unanimous, sent Bayard, a faithful
Federalist, to the House.

In Pennsylvania, the Federalists secured seven presiden-
tial electors by manipulation,^ but the state was undoubtedly
Republican, for only three Federalist Representatives were
elected as against ten RepubHcans. Three of the Republi-
can Representatives, Hanna, Heister, and Smihe, had been
members of the state ratifying convention and had worked
and voted against the Constitution. This was altogether
fitting. Pennsylvania had been driven into ratifying the
Constitution by the shrewd management of the Federal-
ists, four-fifths of the voters failing to take part in the
elections. The Federalists probably held their own, but were
submerged by the rising tide of new voters.^

The South was almost, but not quite solid. Maryland
which had ratified the Constitution by a large majority was
equally divided as to presidential electors and sent three
Federalist Representatives to Congress. Virginia sent a
solid Republican delegation to the House and gave all her
electoral votes to Jefferson. Virginia had ratified the Con-
stitution with great reluctance in 1788, and holding little
of the public debt and having practically no commercial
and manufacturing interests, she found no consolation in
the policies of the government established under the Con-
stitution. North Carolina which had rejected the Con-

» See above, p. 388. » Ibid.

396 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

stitution and finally accepted it under compulsion was
divided in tke electoral vote and sent four Federalists out of a
delegation of eleven Representatives to Congress. With the
exception of Huger, Lowndes, and Rutledge, the South
Carolina Representatives were Republican. The advocates
of ratification in South Carolina had a comfortable ma-
jority in 1788, and it is clear that the fiscal poUcies of the
administration had driven a number of former Federalists
into the RepubUcan camp by 1800. All of the Georgia
delegation were RepubUcans. Georgia had ratified the
Constitution unanimously, but under the stress of an Indian
invasion which threatened the state with destruction if
national aid was not to be secured.

From the point of view of earlier affiHations in the con-
stitutional conflict of 1787-1788, the roll of the House of Rep-
resentatives of the Seventh Congress is interesting. There
were three Federalist members who had voted for the ratifi-
cation of the Constitution as members of their respective
state conventions : Davenport, of Connecticut, and Grove
and Hill, of North Carolina. There were seven Republican
Representatives who had likewise voted, for the Constitution
in state ratifying conventions, and then had allied themselves
with the opposition : Smith and Varnum, of Massachusetts,
Smith and Van Cortlandt, of New York, Jackson, of Vir-
ginia, and Johnston and Wynns, of North Carolina. But
there were twelve Republican members of the House who
had been Anti-Federalists in 1787-1788, and had voted in
their respective state conventions against the Constitution :
Bishop and Cutts, of Massachusetts, Stanton, of Rhode
Island, Hanna, Heister, and Smilie, of Pennsylvania, Cabell,
the two Triggs, of Virginia, Fowler, of Kentucky which
had been a part of Virginia in 1788, and Butler and Sumter,
^ of South Carolina. Not an Anti-Federalist convention

THE GREAT BATTLE OF 1800 397

member of the constitutional conflict found his way into
the House on a FederaHst ticket. Seven Federalists of that
conflict had gone over to the Republicans. But twelve
Anti-Federalists had been loyal through thick and thin
to the cause of opposition.

From an economic point of view the almost solid South
is what we should naturally expect. Georgia and North
Carolina held practically none of the public debt. The
large holdings in South Carolina were concentrated in
Charleston which was the very citadel of Federalism.
Charleston, with a population of about fifteen thousand, was
the only Southern city of any importance. Richmond,
Virginia, had 3761 inhabitants in 1790, and was the metrop-
olis of the state. North Carolina did not have a town with
over two thousand at that date. There was practically no
manufacturing south of the Potomac.^ Nearly all of the
requests for pro.tection which Hamilton received in 1790
and the following years, were from the North. The regis-
tered shipping of Boston alone, in 1799, was larger than that
of Virginia and North Carolina combined.^ Nevertheless,
the net duties on imported goods paid by Virginia alone, in
1792, were almost equal to those of Massachusetts and
Connecticut combined.^ The South exported the raw
products of agriculture while the exports of manufactures,
such as they were, went from the North.* The following
description of Virginia, sent by Heth to Hamilton, in 1792,
applies to the entire South, except Federalist Charleston :
"The trade of this state [Virginia] is carried on chiefly with
foreign capital. Those engaged in it hardly deserve the
name of merchants, being factors, agents, and shopkeepers
of the merchants and manufacturers of Gt. Britain, and their

' Jedediah Morse, American Geography (2d ed.). 1792.
' State Papers: Commerce and Navigation, Vol. I, p. 455.
» Ibid., p. 165. * Ibid., p. 157.

398 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

business to dispose of the goods of that, for the produce of
this country, and remit it to the order of their principals
with whom the profits of the trade, of course, centre.
And this commerce is so divided that it will be extremely
difficult to find unanimity enough to fix upon the place for
estabhshing the bank. Richmond, Petersburg, Norfolk,
and, perhaps, Alexandria may contend for this honor. . . .
If the principal object is discount, I question much whether
it will defray its expenses. For the reasons already given,
there is no considerable mercantile, circulating capital and
there are but few monied men in the country : consequently
the deposits in specie will be inconsiderable, and the mer-
chants or those who carry the trade, having no attachment
to the country, no fixed or permanent residence in it, or any
visible property except their goods and debts, discounts
will be uncertain. . . . [The bank] should receive the
countenance and protection of the state before a branch is
fixed here. Otherwise it might give rise to such an op-
position as would defeat the end. And in my humble
opinion the last essential would be difficult to obtain unless
some leading and influential members of our legislature
should become stock-holders in the bank. . . . Besides
the operation of the government hath by no means been
pleasing to the people of this country. On the contrary
the friends to it are daily decreasing. Some of the highest
in rank and ability among us who supported it in our con-
vention are now extremely dissatisfied and loud in abusing
its measures." ^
'^ However natural was the antagonism between the small
farmers of the South and the rich planters, yet in a contest
\ with the power of capitalism they were united. The south-
ern planters formed the "natural aristocracy" of the South,

> Hamilton Mas., June 28, 1792.

THE GREAT BATTLE OF 1800 399

readily consolidated because they possessed the leisure and V
the intelligence requisite for travel, communication, and
correspondence which fused them into a social group con-
scious of identical interests. It is a curious freak of fortune
that gives to a slave-owning aristocracy the leadership in a
democracy of small farmers, but the cause is not far to seek.
In a conflict with capitalism, the agrarian^ rallied around
that agrarian class which had the cultural equipment for
dominant direction. This fundamental economic interpre-
tation of American politics was made more than half a century
ago, by that penetrating historian Hildreth : " South of the
Potomac the planters were all powerful, while the other sec-
tions of the natural aristocracy [lawyers and clergy and
capitalists] counted in those states for little or nothing in
comparison ; and as the planters were generally opposed to
the funding system, they had little difficulty in carrying
those states into an opposition to the federal administration, \
an opposition into which the outcry so loudly raised in those
states against the Constitution itself was by this time pretty
generally merged. Looking only to fundamentals, no two
classes in the community might seem more naturally antag-
onistic than the small, self-working agricultural proprietors
of the Northern states, and the possessors of large planta-
tions cultivated by slaves. There were, however, some
accidental circumstances which brought these two classes
into close sympathy, giving rise to relations which produced
a remarkable effect on the politics of the United States,
through the traditionary influence of party names and asso-
ciations, prolonged, in some degree, even to the present time
[1856]. The expenses and efforts of the Revolutionary war
had left not only the states and the confederacy, but in-
dividuals also, greatly burdened with debt. Almost all
the small land-holders had been obliged to struggle at once

400 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

'^ against tax-gatherers, state and national, and their own
creditors. . . . But this pecuniary embarrassment was
not confined to the small landholders. It extended in al-
most equal degree to the greater part of the southern planters,
who, besides their more recent debts, found hanging over
their heads, in consequence of the powers given to the general
government to enforce the treaty with Great Britain, that
large mass of ante-Revolutionary claims on the part of
English merchants already more than once referred to.^ . . .
It was on this common ground of pecuniary distress that so
many, both of the aristocratic planters and of the demo-
cratic farmers, had united against the Federal Constitution,
which they justly regarded as the work of the creditor party,
intended and likely to lead to a strict enforcement of con-

^ tracts, both public and private. A common reluctance to
pay, a common dread of taxation, a common envy of the
more fortunate moneyed class, whose position had been so
palpably improved by the funding of the public debt —
though little more so, in reality, than the position of every-
I body else — made both farmers and planters join in those
clamors against the funding system,_^ into which Jefferson
and his co-operators, not content with a mere re-echo of
them, sought to infuse a new bitterness by dark charges of
corruption and alarming insinuations of anti-Republican
designs." ^
V In this general war of the planters and small farmers on
capitalism, it appears that a considerable portion of the
poorer orders in the cities joined. At all events, the Repub-
* lican vote in the cities was very large in 1800, and judging
from the demonstrated facts of the New York City election,
we may assume that it was the smaller folk, not "wealth

» See above, p. 270.

» Hildreth, History of the United States (1856 ed.), Vol. IV, pp. 348-350.

THE GREAT BATTLE OF 1800 401

and talents," that supported Jefferson.-^ This is not sur-
prising. The working class was then small, partly recruited \''
from foreign elements, German and Irish, that had fled from
the oppressions of Europe. The Jeffersonian appeal was
to the "masses" against the "aristocracy of riches," and it
doubtless captured hundreds of the mechanics in Boston,
New York, Philadelphia, and Baltimore. It is true, that
the Jeffersonian leaders had no intention of widening the
suffrage, if their performances during the first decade
of their dominance are to be regarded as an evidence of "|
their intentions, but the masses, then as now, seem to have
been more stirred by denunciation of the rich and mighty
than by constructive proposals on their own behalf. So
we have "the mobs of the great cities" whom Jefferson
personally despised,^ united under his banner with the small
farmers and the slave-owners against the capitalists. That
the Republicans were victorious in 1800 is not surprising.
The wonder is that the small, compact group of capitalists
were able to hold the reins of power for so long a period in a
country predominantly agrarian. V

When, in the late autumn of 1800, the news of the presi-
dential elections at length crept into the urban centres,
Boston, Hartford, New York, Philadelphia, and Charleston,
the Federalists were in utter dismay. All those capitalist^
interests which were collectively known in agrarian lexicon
as "the stock jobbing crowd," the holders of the funded
debt of the United States, the stockholders in the federal ^
Bank, and the protected commercial and manufacturing
classes saw, or thought they saw, in Jefferson's victory a
vision of complete financial ruin. Had not one of their v
spokesmen in the Columbian Centinel, of August 27, 1800,

1 Above, p. 386. " Below, p. 425.

402 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

warned the voters against the agrarian leader from Virginia
Vin terrifying strains : "Tremble then in ease of Mr. Jeffer-
son's election, all ye holders of pubHc funds, for your ruin
is at hand. Old men who have retired to spend the evening
of life upon the fruits of the industry of their youth. Widows
and orphans with their scanty pittances. Pubhc banks,
I insurance companies, literary and charitable institutions,
who confiding in the admirable principles laid down by Ham-
ilton and adopted by Congress and in the solemn pledges of
national honor and property have invested their moneys in
the pubHc debt will be involved in one common, certain and
Viot very distant ruin." ^ Had not the Democrats in their
campaign against the FederaHsts waged a bitter word war
against the "aristocrats," the "fiscal corps," the "stock gam-
blers," the "plunderers of the people," the "thieves on the
farmers' backs," and the "corrupt squadron" in general?
The noble farmer had been called upon by the Repubhcans
to follow the example of '76 and expel from the United
States the "monocrats" who fattened on the people, and
every j)erson who had a dollar to invest had been solemnly
and repeatedly warned by the FederaHsts to vote against
"the enemies of pubhc credit and of commerce." The
issue had been clearly set and the agrarians were triumphant
over the capitalists. tfBut at length a ray of hope penetrated
the gloomy circles of Federalism. The defeat was not un-
1 : conditional. Jefferson and Burr were tied for the presi-
i dency and the election devolved upon the House of Repre-
\ isentatives, where the Federalists were strong enough to de-
li cide the day. And parties that can cast the die can make
I terms.

The astute leaders of Federalism were quick to see the
strategic position which they occupied, and they began at

» Above, p. 360.

THE GREAT BATTLE OF 1800 403

once to consider the problem : "Who is more dangerous to
the fiscal interests, Jefferson or Burr?" The Federalist
leaders in Congress, Gouverneur Morris, of New York,
Bayard, of Delaware, Sedgwick, of Massachusetts, and Rut-
ledge, of South Carolina, brought the keen edge of their
analysis to the situation at once, and came to the conclusion
that finance and commerce had less to fear from Burr. On
January 10, 1801, Sedgwick wrote a letter to Hamilton,^
saying that after considering the dangerous and democratic
notions entertained by Jefferson, he was inclined to sup-
port Burr. Sedgwick then went on to give his estimate of
Burr's character : "He holds to no pernicious theories, but is
a mere matter-of-fact man. His very selfishness prevents
his entertaining any mischievous predilections for foreign
nations. The situation in which he lives [New York City]
has enabled him to discern and justly appreciate the benefits
resulting from our commercial and national systems ; and
the same selfishness will afford some security that he will
not only patronize their support but their invigoration. . . .
If Burr should be elected by the Federalists against the hearty
opposition of the Jacobins, the wound mutually given and
mutually received will probably be incurable — each will
have committed the unpardonable sin. Burr must depend
on good men [i.e., the Federalists] for his support and that
support he cannot receive but by conformity to their views."
It is thus clear that Sedgwick, who was little acquainted
with Jefferson, thought the sage of Monticello was a wild
doctrinnaire who would seek to apply his theories im-
mediately and remorselessly, upsetting the financial and
commercial interests of the country in his vain strivings after
"democracy."

On the same day that Sedgwick wrote this letter, John
Rutledge, a Federalist from South Carolina, also in Wash-

1 Hamilton Mss. (Library of Congress), January 10, 1801,

404 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

ington at the time and a member of Congress, sent to
Hamilton his impressions of the impending battle: "The
federalists think their preferring Burr will be the least mis-
chief they can do. His promotion will be prodigiously-
afflicting to the Virginia faction and must disjoint the
party. If Mr. B.'s presidency be productive of evils, it will
be very easy for us to excite jealousy respecting his motives
and to get rid of him. Opposed by the Virginia party, it
will be his interest to conciliate the federalists and we are
assured by a gentleman who lately had some conversation
with Mr. B. on this subject that he is disposed to maintain
and expand our systems. Should he attempt an usurpation,
he will endeavour to accomplish his ends in a bold manner
and by the union of daring spirits — his project in such a
shape cannot be very formidable and those employed in the
execution of it can very easily be made way with. Should
Mr. Jefiferson be disposed to make (as he would term it) an
improvement (and as we should deem it a subversion) of
our Constitution, the attempt would be fatal to us, for he
would begin by democratizing the people and throwing
everything into their hands." ^

It is abundantly evident from the letters in the Hamilton
Manuscripts preserved in the Library of Congress that
the Federalist leaders in Congress approached Burr and
negotiated with him.^ It would appear also that they re-
ceived aid and comfort from him, although he was wily
enough to avoid committing himself too positively to the
Federalist programme. At all events the news was spread in
Federalist circles to the effect that Burr would not attack
but would "invigorate" the Federalist "systems."

' Hamilton Mss., January 10, 1801.

'On January 9, 1801, James Gunn wrote Hamilton that "Genl. Smith had an
interview with Burr at Philadelphia last Saturday." Hamilton Mss., January 9,
1801.

THE GREAT BATTLE OF 1800 405

Then the masterly Hamilton came to the rescue. He
knew Jefferson 'better than any Federalist leader in Con-
gress. He had served as Secretary of the Treasury while
Jefferson was in the State Department under Washington.
He had analyzed Jefferson's character and sounded the
depths of his principles. He believed that Jefferson, al-V
though the accredited thinker of his party, was also a practi-
cal man, for had he not negotiated at Jefferson's house and
with his cooperation the arrangement whereby one of the \
pillars of the Federalist system, the assumption of state
debts, had been secured in exchange for the location of the
capital on the mud banks of the Potomac ? ^ In his terse andN*
vigorous language he warned the Federalists against Burr
and all his promises and doings and at the same time he
delineated the character of Jefferson in no unmistakable
manner. In his letter to Oliver Wolcott, then Secretary of
the Treasury, dated New York, December 16, 1800, Hamil-
ton cautioned his Federalist friend against preferring Burr :
"There is no doubt but that, upon every virtuous and V
prudent calculation, Jefferson is to be preferred. He is by
far not so dangerous a man ; and he has pretensions to "\
character. As to Burr there is nothing in his favor. . . .
He is truly the CatiKne of America ; and, if I may credit ^
Major Wilcocks, he has held very vindictive language re-
specting his opponents. . . . Yet it may be well enough to
throw out a lure for him, in order to tempt him to start for
the plate, and then lay the foundation of dissension between
the two chiefs. You may communicate this letter to
Marshall and Sedgwick." ^

In a letter written the following day to Wolcott, Hamilton
told him that Burr had the boldness and daring to give success
to the Jacobin system, whereas Jefferson "for want of that

1 Above, p. 171. » Works (Lodge ed.), Vol. VIII, p. 565.

406 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

"Vquality, will be less fitted to promote it." ^ In a long letter
to James A. Bayard, the Representative from Delaware,
Hamilton gave fuller expression to his view that Jefferson,
in spite of his radical doctrines, was, from his character and
principles, less likely than Burr to attempt any application
of them to practical politics: "Perhaps myself the first,
at some expense of popularity, to unfold the true character
of Jefferson, it is too late for me to become his apologist ;
nor can I have any disposition to do it. I admit that his
politics are tinctured with fanaticism ; that he is too much in
earnest with his democracy ; that he has been a mischievous
enemy to the principal measures of our past administrations ;
that he is crafty and persevering in his objects ; that he is
not scrupulous about the means of success, nor very mindful
of truth, and that he is a contemptible hypocrite. But it is
not true, as is alleged, that he is an enemy to the power of
the Executive, or that he is for confounding all the powers in
the House of Representatives. It is a fact which I have
frequently mentioned, that, while we were in the adminis-
tration together, he was generally for a large construction of
the Executive authority and not backward to act upon it
in cases which coincided with his views. Let it be added that
in his theoretic ideas he has considered as improper the par-
ticipations of the Senate in the Executive authority. I have
more than once made the reflection that, viewing himself
as the reversioner, he was solicitous to come into the posses-
sion of a good estate.

"Nor is it true that Jefferson is zealot enough to do anything
in pursuance of his principles which will contravene his popu-
larity or his interest. He is as likely as any man I know to
temporize — to calculate what will be likely to promote his own
reputation and advantage; and the probable result of such a

« Works (Lodge ed.), Vol. VIII, p. 566.

THE GREAT BATTLE OF 1800 407

temper is the preservation of systems, though originally opposed, ^
which, being once established, could not be overturned without
danger to the person who did it. To my mind a true estimate
of Mr. Jefferson's character warrants the expectation of a tem-
porizing rather than a violent system. That Jefferson has
manifested a culpable predilection for France is certainly •
true ; but I think it is a question whether it did not proceed
quite as much from her popularity among us as from senti-
ment and, in proportion as that popularity is diminished,
his zeal will cool. Add to this that there is no fair reason to
suppose him capable of being corrupted, which is a security
that he will not go beyond certain limits." ^ ^

While trying to convince the Federalists at Washington V
that Jefferson was not a man who woufd allow his theoretical
principles to interfere with the practical economic interests \
which were the special care of the Federalist party — fiscal,
commercial, and manufacturing — Hamilton advised themv
that they would do well to be doubly secure by obtaining
from Jefferson, if possible, definite promises as to his policy
on these matters, if elected. To Wolcott he wrote, after
warning him against Burr : " Far better will it be to en-
deavor to obtain from Jefferson assurances on some cardinal
points :

" 1st. The preservation of the actual fiscal system.

"2d. Adherence to the neutral plan.

"3d. The preservation and gradual increase of the navy
[the bulwark of commerce].

"4th. The continuance of our friends in the offices they
fill, except in the great departments, in which he ought to
be left free." ^

1 Ibid., p. 581. Italics mine.
*Ibid., p. 569.

To James A. Ross, a Senator from Pennsylvania, a foremost leader among the
Federalists, Hamilton also wrote: "Let the Federalists vote for Jefferson. But,

408 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

V There is absolutely no doubt that the Federalist managers
in Washington were convinced that Burr, through his
financial and banking connections in New York and his more
intimate knowledge of commercial affairs, was less dangerous
to the capitalistic interests than was Jefferson.^ But they
wanted to receive from the former definite assurances on the
capital points at issue before they elected him to the office
of President. It is highly probable that had Burr "com-
mitted himself" positively on the propositions laid before
' him by the Federalists, he would have received their sup-
port, in spite of Hamilton's advice. The chief negotiator
for the Federalists, James A. Bayard, who held the election
in the hollow of his hand, wrote to Hamilton after the
election was over that he would have taken Burr if he could
have detached him completely from the Republicans, and
he added : "I was enabled soon to discover that he [Burr]
was determined not to shackle himself with Federalist
principles and it became evident that if he got in without
being absolutely committed in relation to his own party he

"Ntvould be disposed and obliged to play the [double] game." ^

as they have much in their power, let them improve the situation to obtain assur-
ances from him :

"1. The preservation of the actual system of finance and public credit.

"2. The support and the gradual increase of the navy.

"3. A bona fide neutrality towards belligerent powers.

"4. The preservation in office of our friends, except in the great departments,
in respect to which and to future appointments he ought to be at liberty to pro-
jnote his friends." In the same strain, Hamilton wrote to Gouverneur Morris,
then Senator from New York, authorizing him to make discreet use of the letter.
Works (Lodge ed.). Vol. VIII, p. 577. Ibid., pp. 672, 573.

' George Bacr, a Federalist member of the House from Maryland wrote : "They
(the Federalists] were less certain of the hostility of Mr. Burr to Federal policy
than of Mr. Jefferson which was known and decided. Mr. Jefferson had identified
himself with, and was at the head of the party in Congress who had opposed every
measure deemed necessary by the Federalists for putting the country in a posture
of defence. . . . His speculative opinions were known to be hostile to the indepen-
dence of the judiciary, to the financial system of the country, and to internal
improvements." Davis, Memoirs of Aaron Burr, Vol. II, p. 116.

'Hamilton Mss., March 8, 1801.

THE GREAT BATTLE OF 1800 409

At a later date, April, 1806, while the matter was still
fresh in his mind, Bayard declared upon his oath, that he had
conducted negotiations with Jefferson, through an intimate
friend. General Smith, and had received assurances that
Jefferson would maintain the three Federalist policies in
question; namely, the support of tha.public... credit, the
maintenance of the navy, and the retention of the. subor-
dinate officers of the government.. Bayard swore that he
had first attempted the negotiation with Jefferson through
John Nicholas, a member from Virginia and a particular
friend of Jefferson, but without avail, for Nicholas would
do no more than assure Bayard of Jefferson's soundness
on the propositions at issue. Bayard then turned to General
Smith and the latter replied on his own authority that
Jefferson could be trusted as to the three points raised.
Bayard then added : " I told him [General Smith] / should
not he satisfied or agree to yield till I had the assurance of Mr.
Jefferson himself; hut, that if he would consult Mr. Jefferson,
and bring the assurance from him, the election should he ended.
The general made no difficulty in consulting Mr. Jefferson
and proposed giving me his answer the next morning.
The next day, upon our meeting, General Smith informed
me that he had seen Mr. Jefferson, and stated to him the
points mentioned, and was authorized by him to say that
they corresponded with his views and intentions, and that
we might confide in him accordingly. The opposition of
Vermont, Maryland and Delaware was immediately with-
drawn, and Mr, Jefferson was made President by the votes
of ten states." ^

But it may be said that this is all second-hand evidence
and is not proof that any propositions ever reached Jefferson
himself. Fortunately, Jefferson has not left us in the dark

1 Davis, Memoirs of Aaron Burr, Vol. II, p. 132. Italics mine.

410 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

in this matter, for in a letter written to Monroe on February
15, 1801, he said : ''Many attempts have been made to ob-
tain terms and promises from me. I have declared to them
unequivocally, that I could not receive the government
in capitulation, that I would not go into it with my hands
tied." ^ Indeed it would be surprising if he had not been
approached, for he was at the time dining at the same
boarding house with Nicholas, Langdon, General Smith,
Albert Gallatin, and other friends and hot partisans.^ To
suppose that these men, knowing full well the terms proposed
by the Federalists, never mentioned them to their chief,
whose fortunes depended upon a little turn of the wheel,
would be to think them capable of enduring a greater strain
than human nature can bear.

The next question that arises is whether Jefferson au-
thorized any one to speak for him and convey to the Federal-
ists his promise to sustain the public credit, uphold the
navy, and keep the Federalists (or at least some of them) in
the subordinate offices. On this point we have a flat
denial from Jefferson, who wrote on April 15, 1806 : "Bay-
ard pretends to have addressed me, during the pending of the
presidential election in February, 1801, through General
Smith, certain conditions on which my election might be
obtained, and that General Smith, after conversing with me,
gave answer for me. This is absolutely false. No proposi-
tion was ever made to me on that occasion by General
Smith, or any answer authorized by me ; and the fact
General Smith affirms at this moment." ' If this denial
is true — if General Smith did not approach Jefferson —
who did approach him, for he admits that propositions
reached him from the Federalists ?

I Works (Washington ed.). Vol. IV, p. 355.

* Adams, Life of Gallatin, p. 253; letter of January 15, 1801, to his wife.

> Works (Ford ed.), Vol. I, p. 312.

THE GREAT BATTLE OF 1800 411

As to the truth of Jefferson's denial, however, we have a
sworn statement by General Smith, made in 1806, which
speaks for itself. General Smith swore that shortly before
the termination of the election dispute, a Federalist, Colonel
Josiah Parker, held a private conversation with him and
asked him what would be Jefferson's conduct, if elected, in
regard to the public debt, commerce, and the navy. General
Smith, saying that he had heard Jefferson converse on
those points, informed Parker about what he understood
were the opinions of that gentleman. Smith then con-
tinued : "I lived in the house with Mr. Jefferson, and, that
I might be certain that what I said was correct, I sought
and had a conversation that evening with him on those
points, and, I presume, though I do not precisely recollect,
that I communicated to him the conversation which I had
with Colonel Parker." ^

The next day, the Federalist politician. General Dayton, \
approached General Smith and privately inquired as to
Jefferson's opinions respecting the navy, commerce, and the
pubHc debt. Smith's account of his answer is most inform-
ing : " I said that I had last night had conversation with Mr.
Jefferson on all those subjects; that he had told me that
any opinion he should give at this time might be attributed
to improper motives ; that to me he had no hesitation in
saying that, as to the pubUc debt, he had been averse to
the manner of funding it, but that he did not beheve that
there was any man who respected his own character who
would or could think of injuring its credit at this time;
that on commerce, he thought that a correct idea of his
opinions on that subject might be derived from his writings,
and particularly from his conduct while he was minister at
Paris, when he thought he had evinced his attention to the

I » Davis, Memoirs of Aaron Burr, Vol. II, p. 134..

412 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

commercial interest of his country ; that he had not changed
his opinion, and still did consider the prosperity of our
commerce as essential to the true interest of the nation;
that on the navy he had fully expressed his opinions in his

' Notes on Virginia ; that he adhered still to the ideas then
given; that he believed our growing commerce would call
for protection; that he had been averse to a too rapid
increase of our navy ; that he beUeved a navy must naturally
grow out of our commerce, but thought prudence would ad-
vise its increase to progress with the increase of the nation,
and that in this way he was friendly to the establishment." ^
To this Smith adds that Dayton appeared pleased with the

'^conversation.

In a little while, General Smith was approached by
another FederaUst, the chief negotiator, Bayard, who stated
that he had it in his power to end the election contest and
wanted information on certain points alluded to by Parker
and Dayton. Smith thereupon rehearsed his conversation
with Jefferson on these points, and Bayard then added a
fourth ; namely, the retention of certain Federalist office-
holders, notably George Latimer, of Philadelphia, and- Mr.
M'Lane, collectors of the port at Philadelphia and Wilming-
ton respectively. Smith said that he had not heard Jeffer-
son speak on that subject. Bayard asked him to inquire
of Jefferson and inform him next day. Smith's sworn state-
ment then continues : ''/ did so. And the next day (Satur-
day) told him that Mr. Jefferson had said that he did not think
that such officers ought to be dismissed on political grounds
only, except in cases where they had made improper use of their
offices to force the officers under them to vote contrary to their
judgment. That, as to Mr. M'Lane, he had already been
spoken to in his behalf by Major Eccleston, and, from the

» Davifl, op. cit., Vol. II, p. 134.

THE GREAT BATTLE OF 1800 413

character given him by that gentleman, he considered him a
meritorious officer; of course, that he would not he displaced,
or ought not to be displaced. I further added that Mr. Bayard
might rest assured {or words to that effect) that Mr. Jefferson
would conduct, as to those points, [evidently about the debt,
commerce, and navy] agreeably to the opinions I had stated as
his. Mr. Bayard then said. We will give the vote on Monday." ^

Twenty-four years after making this sworn declaration,
General Smith wrote to Bayard's sons to the effect that he
had never stated that he had received any proposition
from Mr. Jefferson to be made to Mr. Bayard or any other
person — and that he had never communicated any prop-
osition of any kind from Jefferson to Bayard. In speaking
of the way in which he obtained information from Jefferson
on the points which the Federalists had at heart, Smith
said : " I lodged with Mr. Jefferson, and that night [after my
conference with Bayard] had a conversation with him,
without his having the remotest idea of my object. . . . Satis-
fied with his opinion on the third point, I communicated
to your father the next day — that from the conversation
that I had had with Mr. Jefferson, I was satisfied in my own
mind, that his conduct on that point would be so and so.
But I certainly never did tell your father that I had any
authority from Mr. Jefferson to communicate anything
to him or to any other person." ^

From the evidence thus presented, students will draw
various conclusions as to its meaning and significance, but it
cannot be denied that Jefferson was approached in behalf of
the main interests of the capitalistic group, and that General '

« Ibid., p. 136.

' Ibid., p. 108. Gallatin writing nearly fifty years after the election said that
some of his friends had intermeddled in the election and confounded their opinions
and wishes wi^th those of Jefferson and thus given rise to very unfounded surmises.
Adams, Life of Gallatin, p. 250. Gallatin liked to think of himself as the chief
actor in that scene. Ibid., p. 261.

414 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Smith, known to be living in the house with Jefferson and
very close to him as a warm friend and partisan, assured the
Federalists that they could count upon Jefferson not dis-
turbing the established order. That there was a "bargain"
it is not necessary to suppose, when we remember the skill
which the gentlemen concerned had previously shown in
diplomacy and practical pohtics.^ That Jefferson might
have been elected had there been no intermediary to convey
Federalist opinions to him and his views to the Federalists
is entirely probable. But that his election immediately
followed what the Federalists regarded as "a proper under-
standing" is clearly established.

1 Mr. Charles Francis Adams has said that "even if the terms of the agreement
had been acknowledged, they do not seem to imply any conditions for which the
parties had reason to make excuse." Memoirs of John Quincy Adams, Vol. I, p. 428,
note.

CHAPTER XIV

Jefferson's economics and politics

Jefferson never wrote anything approaching a treatise
on government or poHtical science, and his philosophy of
pontics must, therefore, be sought among his letters and
pubhc papers.^ In many ways this must be an unsatisfac-
tory method of procedure, for these scattered documents
were written for varying purposes and directed to particular
circumstances, so that there are among them many contra-
dictions, both real and apparent. It would be easy, by
selecting passages and tearing them from their historical
connections, to build up a Jeffersonian political theory quite
at variance with the fundamental doctrines which he enter-
tained. Like all men of a speculative turn of mind, he A
doubtless hoped for a system too ideal for the world of fact,
and accordingly it is a question whether one should con-
struct his philosophy out of occasional theoretical utter- »
ances or out of statements directed to immediate practical
ends which were in large part determined by outward con-

1 Although Jefferson wrote no treatise on government expounding his system of
politics, it is interesting to note that he thoroughly indorsed Taylor's Inquiry into
the Principles and Policy of the Government of the United States (see above, Chap. XI)
and declared that Col. Taylor and he had never differed on any political principle
of importance. Works (Washington ed.), Vol. VII, p. 191. How much stress to
lay upon this indorsement it is difficult to say, for Jefferson also spoke highly of
John Adams' system of political science. On February 23, 1787, Jefferson wrote to
Adams from Paris commending his Defence of the Arnerican Constitutions, which
was the text-book of those who frankly believed in the necessity and desirability of
class rule. "I have read your book with infinite satisfaction and improvement. It
will do great good in America. Its learning and its good sense will, I hope, make
it an institute for our politicians, old as well as young." Works (Washington ed.),
Vol. II, p. 128.

415

416 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Mitions over which the ideahst had no control. In other

words, the problem is whether we should accept as the

i Jeffersonian system the theories of government which he

entertained for a reasonably perfected humanity, or those

theories which he sought to apply when called upon to make

"Vdecisions in the world of practical politics.

V The matter of the Virginia constitution of 1776 affords
an interesting illustration of this difficulty. It seems reason-
ably certain that about that time Jefferson had come to
beheve in what he vaguely called "a general suffrage,"
and yet in making a draft of a state constitution for the use
of his friends in Virginia he proposed to hmit the suffrage
to freeholders and taxpayers. Furthermore, twenty-four
years afterward, in a private letter, he wrote that had he
been in the Virginia convention he would "probably have

' proposed a general suffrage ; because my opinion has always
been in favor of it. Still I find some very honest men who,
thinking the possession of some property necessary to give
due independence of mind, are for restraining the elective fran-
chise to property." ^ Just why he thought it advisable to
suggest a suffrage restricted by property quahfications when
drafting a plan of a constitution, and yet declared that
could he have been present in the convention he would have
proposed a "general suffrage" is not at all clear. Neither
is it clear whether we should take as his doctrine on the suf-
frage, a theoretical statement made after the fact, or the
statement directed to immediate ends. Students will prob-
Vably choose according to their predilections and sympathies.
A further interesting illustration of the difficulty of getting
at the true Jeffersonian system is afforded by the case of
the judiciary. It has been the fashion of opponents of
judicial control over legislation to call to their support the

» Writings (Ford ed.), Vol. VII, p. 454 (1800).

JEFFERSON'S ECONOMICS AND TOLITICS 417

vigorous criticisms of the judiciary made by Jefferson, and V
perhaps no one ever made more effective use of them than
did Lincoln after the Dred Scott decision.^ An examina-
tion of the citations, however, shows that they are all taken
from papers written after Jefferson became President and
during that long period of conflict between his party and the
bold warrior of Federalism, Chief Justice Marshall. It is
undeniable that at the time of the formation of the Consti-
tution, Jefferson privately entertained the belief that the
judiciary should have been given the express power to
negative acts of Congress.^ It is also certain that at the same
time Jefferson feared legislative despotism, that tyranny of
majorities, which judicial control was designed to obviate.^

With the reconciliation of these apparent contradictions
we are not concerned here. The problem at hand is to
ascertain whether underlying all his general doctrines
there was not in Jefferson's political science a reasonably
clear recognition of economic forces as the basis of party
divisions. Here, too, we come face to face with apparent
contradictions. In a long and important letter written to
Judge Johnson, on June 12, 1823, Jefferson expounds his
view of the causes of the cleavage between the Federalists
and Republicans, and in this document he ascribes the
origin of the two parties to psychological differences, holding
that the Republicans "cherished" the people and the
Federalists "feared and distrusted" them.^ "The fact is,"
he says, "that at the formation of our government, many
had formed their political opinions on European writings
and practices, believing the experience of old countries,
and especially of England, abusive as it was, to be a safer

' Haines, The American Doctrine of Judicial Control, p. 225.

* Beard, The Supreme Court and the Constitution, p. 127.
' Writings (Ford ed.), Vol. V, p. 83.

* Works (Washington ed.), Vol. VII, p. 290.
2e

418 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Vguide than mere theory. The doctrines of Europe were,
that men in numerous associations cannot be restrained
within the Hmits of order and justice, but by forces physical
and moral, wielded over them by authorities independent
of their will. Hence their organization of kings, hereditary
nobles, and priests. Still further to constrain the brute
force of the people, they deem it necessary to keep them down
by hard labor, poverty, and ignorance, and to take from
them, as from bees, so much of their earnings, as that unre-
mitting labor shall be necessary to obtain a sufficient surplus
barely to sustain a scanty and miserable life. And these
earnings they apply to maintain their privileged orders in
splendor and idleness, to fascinate the eyes of the people,
and excite in them an humble adoration and submission,

Nas to a superior order of beings."

Here we have in concise form Jefferson's statement of the
Old World theory of politics : The rule of classes originates
in the nature of man ; the masses are so brutish that they
can be restrained only by physical and moral forces. The
exploitation of the masses is necessary to keep them down,
and the application of the revenues of exploitation to luxury
and dazzling splendor is a further requisite of social order.
Thus Jefferson appears to believe that European govern-
ments rested upon a theory about the moral depravity of the
masses, according to which class rule was to be viewed as
an instrument for the maintenance of public order, and
exploitation was a mere incident to the process. In other
words, he reverses the facts in his theory, for most scholars
hold to-day that exploitation was itself the origin of the state
and class rule, and that government and good order were
incidental products.^

' Jenks, History of Politics. Ponder also the significant words of the profoundest
student of law that England has produced : "If we use the term in this wide sense
(the barbarian conquests being given us as an unalterable fact) feudalism means

JEFFERSON'S ECONOMICS AND POLITICS 419

But with the correctness of Jefferson's interpretation
we are not concerned. For our purposes, the point is that \^
he apparently rests his concept of government upon a
theory of human nature. He does not, however, accuse
all of the Federalists of entertaining the doctrine of class
rule in its pristine purity. "Although few among us," he
continues, "had gone all these lengths of opinion, yet many
had advanced, some more, some less, on the way. And
in the Convention which formed our government, they
endeavored to draw the cords of power as tight as they ^
could obtain them, to lessen the dependence of the general
functionaries on their constituents, to subject to them
those of the states, and to weaken their means of main-
taining the steady equilibrium which the majority of the
convention had deemed salutary for both branches, general
and local. To recover, therefore, in practice the powers
which the nation had refused, and to warp to their own
wishes those actually given, was the steady object of the
Federal party,"

It will be here noted that Jefferson does not admit for a
moment that the majority of the Convention which drafted
the Constitution entertained Old World notions of class
rule ^ or sought to draw too tightly the cords of power in the
new instrument of government, or to lessen the dependence \
of the general functionaries on their constituents, or to
subject state to national authorities. He cannot admit
that the Constitution was a class instrument or that thev

civilization, the separation of employments, the division of labor, the possibility
of national defence, the possibility of art, science, literature, and learned leisure.
. . . When we therefore speak ... of forces which make for the subjection of the
peasantry to seigniorial justice and which substitute the manor with its villeins for
the free village, we shall ... be speaking not of abnormal forces, not of disease,
but in the main of normal and healthy growth. Far from us indeed is the cheerful
optimism which refuses to see that the process of civilization is often a cruel process."
Maitland, Domesday Book and Beyond, p. 22.
' See Economic Interpretation, Chap. VI.

420 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

"^party of state's rights was not in a majority in the Con-
vention which drafted it. On the contrary the Federahst
party has ''usurped" authority which the Convention did
not intend to convey to the national government. The
Constitution is a Repubhcan document ; Federahst class

Vrule is sheer usurpation.^ To have assailed the Ark of the
Covenant would have been impolitic in the Republicans.
Consequently they chose the better course of seizing it for
themselves.

V Having disposed of the Federalists as a small group of
usurpers who had violated the spirit of the Constitution
and based their theory of government on the doctrine
of human depravity, Jefferson sets forth the high prin-
ciples which actuated his party, and first among them he
puts devotion to the Constitution. "Our [object], on the
contrary," he continues, "was to maintain the will of the
majority of the convention and of the people themselves.

I We believed, with them, that man was a rational animal,
endowed by nature with rights and with an innate sense
of justice; and that he could be restrained from wrong
and protected in right, by moderate powers, confided to
persons of his own choice and held to their duties by de-
pendence on his own will. . . . We beheved that men,
enjoying in ease and security the full fruits of their own
industry, enlisted by all their interests on the side of law
and order, habituated to think for themselves, and to follow
their reason as their guide, would be more easily and safely
governed, than with minds nourished in error, and vitiated
and debased, as in Europe, by ignorance, indigence and op-
pression. The cherishment of the people was our principle,

Vhe fear and distrust of them, that of the other party." ^

' See above, Chaps. I and II.

' In two letters written about the same time. Jefferson attributes the origin of
political parties to differences in temperament. In a letter to Lafayette, Novem-

JEFFERSON'S ECONOMICS AND POLITICS 421

Although Jefferson thus based his explanation of the V
source of the party antagonism on a theory of human
nature, it must not be supposed that he was unaware of
the economic character of the masses aligned on his side.
Curiously enough in the very passages in which he attributes
the party cleavage to the distribution of the capacity for
cherishing or distrusting the people, he positively states
that his party was composed of "the landed and laboring |
interests of the country," and that the cities were "the
strongholds of Federalism." Thus he recognizes that
the divergence in views concerning human nature which
caused the split into parties was not fortuitous, but ran
along distinctly economic lines. The landed and laboring
interests cherished the people ; the movable property, or
capitalistic, interests distrusted them. V

The landed interests being in an overwhelming majority V
naturally could cherish themselves, but it is not so evident
that they or their leader, Jefferson, so cordially cherished
the laboring interests of the cities. On the contrary,
Jefferson, repeatedly and with great deliberation, declared,
before his campaign for the presidency, both in public ^
and private, his profound distrust of the working-classes
of the great cities. And after he was elected President
he consciously directed his policy in such a manner as to
make it appeal first of all to the agricultural sections of
the country.^ His very democracy was founded upon an v

ber 4, 1823, he says : "In truth, the parties of Whig and Tory, are those of nature.
They exist in all countries, whether called by these names or by those of Aristocrats
and Democrats, Coti Droite and Cot6 Oauche, Ultras and Radicals, Serviles, and
Liberals. The sickly, weakly, timid man fears the people and is a Tory by nature.
The healthy, strong and bold, cherishes them and is formed a Whig by nature. . . .
The Tories [in the United States] are for strengthening the executive and general
government ; the Whigs cherish the representative branch, and the rights reserved
by the states, as the bulwark against consolidation, which must immediately gener-
ate monarchy." Works (Washington ed.), Vol. VII, p. 325. See also to the same
effect a letter to H. Lee, ibid., p. 376. ' See below, p. 436.

422 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

N/^conomic system of small land-owning farmers — upon
that wide distribution of property which was possible
only where land was cheap and plentiful. It did not em-
brace a working-class as that term is conceived in modern
*^ i life. The incompatibility of an immense proletariat and an
equalitarian political democracy, he clearly recognized, but
he never attempted to solve the problem which it presented.
In fact, he apparently believed that the problem was in-
soluble and that the only hope of American democracy was
to escape from it by preventing its appearance on the soil of

M.he United States.

All this is set forth in a wonderful chapter in his Notes
on Virginia written in the winter of 1781 and 1782, in re-
sponse to certain queries put to him by M. de Marbois,
then secretary of the French legation in the United States,
and printed for private circulation in Paris, in 1784. In
the chapter, entitled "Query XIX: The present state of
Manufactures, Commerce, Interior and Exterior trade,"

\Jefferson made it clear in a few cogent sentences that he
fully understood the drift of economic tendency toward
manufacturing, the effect of this new economic force on
politics, and the relation of a proletariat to democracy.^

' Here he is writing without any immediate practical pur-
pose in view. The momentous future, with its immense
constitutional and political changes, is veiled to him. He
is letting his mind play freely upon the relation of economics

"^to politics.

•V He is well aware of the fact that European political

economists advocate the poHcy of encouraging manufac-

\ turcs for the purpose of making their respective nations

^ self-sufficient, but he urges that the people of the United
/ States are in a totally different economic position. "The

» Works (Washington ed.), Vol. VIII, pp. 405 £f.

JEFFERSON'S ECONOMICS AND POLITICS 423

political economists of Europe," he says, "have established V
it as a principle, that every state should endeavor to manu-
facture for itself; and this principle, like many others,
we transfer to America, without calculating the difference
of circumstance which should produce often a difference of
result. In Europe the lands are either cultivated or locked
up against the cultivator. Manufacture must, therefore, be
resorted to of necessity, not of choice, to support the sur-
plus of their people. But we have an immensity of land
courting the industry of the husbandman. Is it best then
that all our citizens should be employed in its improve-
ment, or that one half should be called off from that to
exercise manufactures and handicraft arts for the other?"

In Jefferson's mind, the answer to this question depends
upon an appreciation of the intimate relation of fundamental j
economic processes to human character and thus inevitably
to that independence and equality which are the very
essence of democracy. It is no agrarian's scorn for the
shopkeeper which he displays. He knows that the mer-
chant or manufacturer has hands, organs, dimensions, senses,
affections, and passions like those of the farmer ; but he
believes that different modes of acquiring a livelihood give
such different directions to the senses, affections, and
passions as to produce fundamental differences in character.
The farmers, owning their own soil, tilling it with their own
hands, looking not to their fellow-men but to the sun, the
earth, and their labor for their sustenance, must perforce
have an independence of character which corresponds to
their economic independence. Subservience, corrupting
luxury, and venaHty cannot flourish where labor is neces-
sary to a livelihood and yet is certain of its reward. "Those
who labor in the earth," exclaims Jefferson, "are the
chosen people of God, if ever He had a chosen people,

424 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

ywhose breasts He has made his peculiar deposit for sub-
stantial and genuine virtue. It is the focus in which He
keeps ahve that sacred fire, which otherwise might escape
from the face of the earth. Corruption of morals in the
mass of cultivators is a phenomenon of which no age nor
nation has furnished an example. It is the mark set on
those, who, not looking up to heaven, but to their own soil
and industry, as does the husbandman, for their subsist-
ence, depend for it on casualties and caprice of customers."

That confidence in the reasonableness and virtue of man
which Jefferson made the basis of his party's faith, wide
as it was, did not extend to all men regardless of their
economic interests and occupations, but was restricted to
the free, stalwart farmer secure in his economic basis.
I "Dependence," says Jefferson, "begets subservience and
venality, suffocates the germ of virtue, and prepares fit
tools for the designs of ambition. This, the natural prog-
ress and consequence of the arts, has sometimes perhaps
been retarded by accidental circumstances; but generally
speaking, the proportion which the aggregate of the other
classes of citizens bears in any state to that of its husband-
men, is the proportion of its unsound to its healthy parts,
and is a good enough barometer whereby to measure its
degree of corruption."

For this disease which destroys society and makes im-
possible the democracy of equality and independence, there
is no remedy. The only hope is to bar it from our shores
forever: "While we have land to labor, then, let us never
wish to see our citizens occupied at a work-bench or twirl-
ing a distaff. Carpenters, masons, smiths are wanting
in husbandry ; but, for the general operations of manu-
facture, let our workshops remain in Europe. It is better
«v/to carry provisions and materials to workmen there, than

JEFFERSON'S ECONOMICS AND POLITICS 425

bring them to the provisions and materials, and with themV
their manners and principles. The loss by the transporta-
tion of commodities across the Atlantic will be made up in
happiness and permanence of government. The mobs of
great cities add just so much to the support of pure gov- '
ernment; as sores do to the strength of the human body.
It is the manners and spirit of a people which preserve a
republic in vigor. A degeneracy in these is a canker which
soon eats to the heart of its laws and constitution." ^ ^

This thoroughgoing distrust of the artisan class was not
an outburst of momentary feeling, but the expression of a
reasoned conviction based upon an analysis of the economic
foundations of democracy. It is formulated in his Notes
on Virginia with more precision than in any other of Jeffer-
son's writings, but traces of it are to be found more or less
completely in other places. For example, when John Jay
wrote him in the summer of 1785, asking him whether "it
would be useful to us, to carry all our own productions or
none," he replied: "Were we perfectly free to decide thisV
question, I should reason as follows. We have now lands
enough to employ an infinite number of people in their
cultivation. Cultivators of the earth are the most valu- i
able citizens. They are the most vigorous, the most in-
dependent, the most virtuous, and they are tied to their
country, and wedded to its liberty and interests, by the

' Washington, to a certain extent, shared Jefferson's view. He wrote to the
latter in 1788: "I perfectly agree with you that an extensive speculation — a
spirit of gambling — or the introduction of anything which will divert our atten-
tion from agriculture must be extremely prejudicial if not ruinous to us. But I
conceive under an energetic general government such regulations might be made
and such measures taken as would render this country the asylum of pacific and
industrious characters from all parts of Europe — would encourage the cultivation
of the earth by the high price which its products would command — and would
draw the wealth and wealthy men of other nations into our own bosom, by giving
security to property and liberty to its holders." Documentary History of the Con-
stitution, Vol. IV, p. 429.

426 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Vmost lasting bonds. As long, therefore, as they can find
employment in this line, I would not convert them into
mariners, artisans, or anything else. But our citizens will
find employment in this line, till their numbers, and of
course their productions, become too great for the demand,
both internal and foreign. This is not the case as yet, and
probably will not be for a considerable time. As soon as

' it is, the surplus of hands must be turned to something else.
I should then, perhaps, wish to turn them to the sea in
preference to manufactures ; because, comparing the char-
acters of the two classes, I find the former the most valuable
citizens. I consider the class of artificers [artisans] as the
panders of vice, and the instruments by which the liberties

Nfof a country are generally overturned." ^

N^ Even when urging most strongly the principle of majority
rule and reliance upon the mass of the people as the surest
safeguard of republican government, Jefferson qualified his
doctrines by making them inapplicable to an industrial
population. Writing to James Madison, on December 20,

I 1787, he said that the democratic principle of a mild gov-
ernment dependent upon the intelligence of the masses
would be very well "as long as we remain virtuous; and
I think we shall be so, as long as agriculture is our prin-
cipal object, which will be the case, while there remain
vacant lands in any part of America. When we get piled
upon one another in large cities, as in Europe, we shall
become corrupt as in Europe, and go to eating one another

"^as they do there.

" 2

> Works (Washington ed.), Vol. I, p. 403.

» Ihid., Vol. II, p. 332. In a pamphlet entitled An Inquiry into the Present
State of the Foreign Relations of the Union, published at Philadelphia in 1806
(Library of Congress Miscellaneous Pamphlets, Vol. 1011) a writer makes the
following interesting commentary on Jefferson's opposition to industrial and
commeicial pursuits: "Wrapt up in the fulness of self-consequence and strong
enough, in reality, to defend ourselves against every invader, we might enjoy

JEFFERSON'S ECONOMICS AND POLITICS 427

In view of his avowed hostility to a working-class and'V
to the arts and artifices of commerce, finance, and manu-
factures and his whole-hearted devotion to agriculture,
it is impossible to believe that Jefferson did not consciously
and purposely direct his public policies and his political
appeal to the agricultural sections of the population. Of
course, it may be said that after his election to the presi- ^
dency he softened his social antipathies and tempered his
administration to commerce and manufacture. In a sense
this is true. As we shall see later, Jefferson was, what V

an eternal rusticity and live, forever, thus apathized and vulgar under the shelter
of a selfish, satisfied indifference. I know that a reduction of things to this un-
charitable state is the wish of certain high characters among us who deem them-
selves wise. The author of the Notes on Virginia began the clamour against a
foreign commerce of the United States, and stated as one of hib many pretty theo-
retical impossibilities that it would be better for us to 'abandon the ocean.' Mr.
Gallatin almost denounced commerce in his speeches upon the establishment of
the navy and the cry has been steadily kept up by all the gentlemen of that party.
But I will not insult the understanding and taste of Americans by asking them if
they are willing to live under such monkish discipline. . . . Indulgent thus far, it V
becomes us to protest, in the name of reason and the peace of our country, against
the remotest attempts to apply this dark, unsocial scheme to any practical purpose.
Harmless as it may be in theory, it is full of ruin when brought into real operation.
To strike a blow at our foreign commerce from any quarter of the country is to sever
the union of the states. The question is not whether it would be better for us to
direct the resources and population of America entirely to agriculture and internal
navigation, leaving the rest for strangers to fetch and carry. The decision is already
made. It is indifferent whether or not in the halls of academies or in the studies
of the learned, but a strong decision, from which there is no appeal, is made in the
practices, the habits, and the pursuits of our citizens ; and the impulse of commercial
enterprise which they have gotten will operate in all its vigor, to the rolling up of |
the records of time. It is too late to think of drawing off the overflowings of the
spirit of adventure that urges our countrymen to have the honors of the ocean
and to divert it to the wilds of Georgia and Maine. . . . We are not only, to all
intents and purposes a commercial people, but after Great Britain, there is no na-
tion whose commerce bears any proportion to that of America. . . . We legislate
for commerce, we fight for it, we negociate for it, we derive our national resources
from it. . . . All Europe strain every nerve for commercial advantages and fight
for commercial interests ; and what are the reasons which have so much cogency for
the obtaining of these great points? It is because commerce creates, both by its
direct and indirect operation, a wealth which contributes in a prodigious degree,
to the enlargement and strength of what has been emphatically called the sinews
of a state, its revenuea. ... In a word, commerce has become the mainspring
of nations." V

428 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

VHamilton declared him to be, a theorist who never allowed
his dogmas to interfere with the pressing exigencies of
practical affairs. But when all is done and said, it yet
remains true that, within the limits of stern realities, Jef-
ferson was agrarian in his principles and practices. Had
V . I he left no other records than those just cited, we should
be impelled to look to agrarianism as the source of the
political party that gathered about him as a leader. He
was not deahng in the fustian of a demagogue when he ex-
pressed his deep and firm faith in the virtue of the farmer
and in the fitness of the farming . class to maintain a stable
republican government. His faith was a class faith and his
vappeal was a class appeal.

'V There is, however, plenty of evidence to show that Jeffer-
son's antagonism to the Federahst administration grew out
of his belief that it was being used to advance the interests
jof financiers and manufacturers. As early as February 4,
1791, he sensed the opposition of the Southern states to the
fiscal policy of the new government, and proposed as a
remedy for the "corruption" in the form of government
"the augmentation of the numbers in the lower house, so
as to get a more agricultural representation, which may put
"^that interest above that of the stock jobbers." ^

When Washington remarked to Jefferson early in 1792
that serious dissatisfaction had arisen with the new gov-
ernment, the latter replied that the fiscal system of the
Treasury Department was responsible for the trouble, say-
ing: "I told him, that in my opinion, there was only a
single source of these discontents.' Though they had in-
deed appeared to spread themselves over the War depart-
ment also, yet I considered that as an overflowing only
from their real channel, which would never have taken

> Writinga (Ford ed.), Vol. V, p. 275.

JEFFERSON'S ECONOMICS AND POLITICS 429

place, if they had not jfirst been generated in another de-
partment, to wit, that of the Treasury." ^

The superficial observer, on encountering again and \
again in Jefferson's writings, the linking of FederaHsm with
"stock-jobbing" and "paper operations," might suppose
that this was merely a trick of a politician seeking to put
his opponents in a bad light, but implied no fundamental
economic antagonism. Nothing could be further from
the truth. The fact is that the capitalist mode of accu-
mulation was foreign to Jefferson's personal economic
experience and of the planting class to which he belonged
— a class based, as Calhoun long afterward pointed out,
upon the simple exploitation of slave labor and not upon
the arts of finance and commerce.^ Undoubtedly the heavy
indebtedness of the planting interests to British creditors
and the accumulation of the national debt in urban centers
embittered his antipathy to capitahst methods. But it is
not necessary to introduce this element to account for the
psychology and economics of the slave-owning planter.

There is no doubt at all that Jefferson believed the
landed interest to be the economic foundation of the Re-
publican party.' This would be inferred, of course, from

» Works (Washington ed.), Vol. IX, p. 104. See above, pp. 110 ff.

» The Works of John C. Calhoun. (1870), Vol. II, pp. 629 ff.

» In a letter of May 13, 1793, Jefferson made the following economic analysis of
the political alignment : "The line is now drawn so clearly as to show on one side,
1. The fashionable circles of Philadelphia, New York, Boston, and Charleston,
(natural aristocrats). 2. Merchants trading on British capital. 3. Paper men,
(All the old tories are found in some one of the three descriptions). On the other
side are, 1. Merchants trading on their own capital. 2. Irish merchants.
3. Tradesmen, mechanics, farmers, and every other possible description of our
citizens." Works (Washington ed.). Vol. Ill, p. 557. Jefferson said in a private
letter in 1786 : "I own it to be my opinion that good will arise from the destruction
of our credit. I see nothing else which can restrain our disposition to luxury, and
to the change of those manners which alone can preserve republican government."
Ihid., Vol. I, p. 518. When on August 6, 1793, Washington called on Jefferson to
converse with him about his withdrawal from the office of the Secretary of State,
the latter remarked upon the particular uneasiness of his situation in the place,

430 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

his general notion that agriculture was the only enduring
basis of repubhcan government, but on more than one
occasion he referred to that interest as the object of his
soUcitude in politics and the chief support of the Repub-
lican party. In his famous letter to Mazzei, an Italian
friend, written on April 24, 1796, he aUgns the landed
interest on one side and the capitalistic interests on the other
side. In fact, this letter is such a succinct statement of
Jefferson's economic interpretation of contemporary politics
Vthat it deserves quotation here at length: "The aspect of
our politics has wonderfully changed since you left us.
In place of that noble love of liberty and repubhcan gov-
ernment which carried us triumphantly through the War,
an Anglican monarchical aristocratical party has sprung
up, whose avowed object is to draw over us the substance,
as they have already done the forms, of the British govern-
ment. The main body of our citizens, however, remain
true to their republican principles ; the whole landed interest
is republican, and so is a great mass of talents. Against
us are the executive, the judiciary, two out of three branches

^ of the legislature, all the officers of the government, all
I who want to be officers, all timid men who prefer the calm
of despotism to the boisterous sea of liberty, British mer-
chants and Americans trading on British capitals, speculators
and holders in the banks and public funds, a contrivance
invented for the purposes of corruption, and for assimilating
us in all things to the rotten as well as the sound parts of
the British model. It would give you a fever were I to

'^ name to you the apostates who have gone over to these

" where," he added, "the laws of society oblige me always to move exactly in the cir-
cle which I know to bear me peculiar hatred ; that is to say, the wealthy aristocrats, the
merchants connected closely with England, the new created paper fortunes ; that
thus surrounded, my words were caught, multiplied, misconstrued, and even fabri-
cated and spread abroad to my injury." Works (Washington ed.), Vol. IX, p. 166.

JEFFERSON'S ECONOMICS AND POLITICS 431

heresies, men who were Samsons in the field and Solomons V
in the council, but who have had their heads shorn by the
harlot England. In short, we are likely to preserve the
liberty we have obtained only by unremitting labors and
perils. But we shall preserve it ; and our mass of weight \
and wealth on the good side is so great as to leave no danger
that force will ever be attempted against us. We have
only to awake and snap the Lilliputian cords with which
they have been entangling us during the first sleep which
succeeded our labours." ^ From this private letter inV
which Jefferson wrote with unrestrained frankness, it is
clear that he regarded the antagonism as existing mainly
between the landed and capitalistic interests. The latter
had captured the former during the lull which followed
the Revolution, but the agrarians were destined in good
time to recover their liberty.

A year later in a letter to Colonel Arthur Campbell, dated
at Monticello, September 1, 1797, Jefferson gave a similar
interpretation of the political cleavage : capitalism versus
agrarianism. "It is true," he says, "that a party has risen V
up among us, or rather has come among us, which is endeav-
oring to separate us from all friendly connection with France,
to unite our destinies with those of great Britain, and to
assimilate our government to theirs. Our lenity in per-
mitting the return of the old tories, gave the first body to
this party ; they have been increased by large importations ^
of British merchants and factors, by American merchants
dealing on British capital, and by stock dealers and banking
companies, who, by the aid of a paper system, are enriching
themselves to the ruin of our country, and swaying the
government by their possession of the printing presses,

which their wealth commands, and by other means, not

' Writings (Washington ed.). Vol. IV, p. 139. The italics are mine.

432 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

V always honorable to the character of our countrymen.
Hitherto their influence and their system have been irresist-
ible, and they have raised up an executive power which is
too strong for the Legislature. But I flatter myself they
have passed their zenith. The people, while these things
were doing, were lulled into rest and security from a cause

. which no longer exists. No prepossessions will now shut
their ears to truth. They begin to see to what port their
leaders were steering during their slumbers, and there is yet
time to haul in, if we can avoid a war with France. All can
be done peaceably, by the people confining their choice of
Representatives and Senators to persons attached to re-
publican government and the principles of 1776, not office
hunters, hut farmers whose interests are entirely agricultural.
Such men are the true representatives of the great American
interest, and are alone to he relied on for expressing the proper

"American sentiments. ^^ ^

v\ Even Jefferson's foreign policy had its economic aspects.
His deep antipathy toward capitalistic interests in general
was partly responsible for his opposition to Hamilton's
conciliatory policy in dealing with Great Britain. Natu-
rally he entertained some bitter feelings toward Britain as

\ a result of the revolutionary struggle and sympathized with
the French on account of his theoretical objections to
monarchy as such, but there is reason to believe that much
of his hostility toward the mother-country may be traced
to the fact that the English sympathizers who remained in
America and the English who came over to trade after the
Revolution were closely associated with the economic inter-

vcsts which supported Federalism.^ Jefferson was therefore

> Works (Washington ed.), Vol. IV, p. 197. Italics mine.

• Naturally the loading Federalists, being residents of the cities, came into closer
contact with the British merchants and sympathizers and entertained less bitter-
ness toward things British than did the countrymen. As members of the mercan-

JEFFERSON'S ECONOMICS AND POLITICS 433

using no figure of speech when he declared that the Federal-
ist party was British in sympathy and affiliation. This he
made clear on several occasions, but nowhere more specifi-
cally than in a letter written to Elbridge Gerry in 1797.

In this letter, Jefferson remarked that he wished the
United States to" take a neutral and independent stand in
the matter of foreign policy and that he had on many occa-
sions, in a private and also an official capacity, informed

tile clas3, the Federalists also had close relations with the former enemies of the new
Republic. This was irritating, of course, to the Republicans. A very interesting
example of the way in which relations were renewed after the heat of the war had
died down is afforded by the following letter by Sir John Temple, British Consul
General in the United States to the British foreign office, concerning Doctor William
Samuel Johnson, who had been a member of the Convention which framed the
Constitution and was elected one of the first United States Senators from Con-
necticut :

" New York, 2d of Octo : 1788
" Dear Sir,

" This morning after I had closed my Letter to My Lord Carmarthen, Doctor
Johnson now President of Columbia College in this City a most Respectable
Character who hath been constantly attached to his Majesty & to his Government
called on me to supplicate a favor from Lord Carmarthen. There are it seems
several Vacancies in the Council of Bermuda, and very few fit and suitable people
there, as I am informed to fill those Vacancies. Doctor Johnson has a son, Practic-
ing the Law in that Island, a Worthy Man of Abilities & good Education, Whom
he wishes to have appointed to one of those Vacancies. There is not a Shilling
Emolument to the Appointment but merely a feather and Rank to those who have
them. I do not presume to Ask a favor of Lord Carmarthen but I trust his Lord-
ship will not be displeased at my requesting of you to inform him that the Obliging
such a Person as Dr. Johnson in the appointment I have mentioned may very prob-
ably be of essential service to His Majesty's Interest in this part of the World. . . .
I have since my Residence here found him undeviating in his Attachment to the
Interests of our Nation and I have had some useful information from him. Though
much Courted and Solicited by the people, he would have nothing to do with public
affairs during the late contest, nor until his Majesty had granted Independence to
these States, after that he took a seat in Congress, had a great share in framing the
new Constitution and would now probably be sent Minister to London if the
States were not fearful for his being too much attached to the Interests and Govern-
ment of Gt. Britain. His Son (whose name is William Johnson) I know to be a
Respectable Character able in the Law & to Whom the Collector of the Customs at
Bermuda hath recourse (from the insufficiency of the Attornies there) for Law
Council upon all Necessary Occasions in his office.

" I am Dr Sir

"Your Most Obedt. Servant

"J. Temple."
Columbia University Alumni News, October 23, 1914.

434 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

N/the British that they could expect equal treatment if they
would only be content with it. In spite of his reassurances,
however, they had demanded nothing less than a monopoly
of commerce and influence in America and had in the course
of economic development secured it. The weakness of the
nascent capitalistic interests in the United States gave
British financiers and merchants an extraordinary power in
directing the trend of American banking and trade, and of
this Jefferson was fully aware, for he was at great pains to
explain to Gerry in detail the varieties of American economic

^servitudes to Great Britain. "When we take notice," he
said, "that theirs is the workshop to which we go for all we
want ; that with them center, either immediately or ulti-
mately, all the labors of our hands and lands ; that to them
belongs either openly or secretly the great mass of our
navigation ; that even the factorage of their affairs here, is
kept to themselves by factitious citizenships ; and these
foreign and false citizens now constitute the great body of
what are called our merchants, fill our sea-ports, are planted
in every little town and district of the interior country,

f sway everything in the former places by their own votes,
and those of their dependants, in the latter, by their insinu-
ations and the influence of their ledgers ; that they are
advancing fast to a monopoly of our banks and public funds,
and thereby placing our public finances under their control ;
that they have in their alliance the most influential charac-
ters in and out of office ; when they have shown that by
these bearings on the different branches of the government,
they can force it to proceed in whatever direction they
dictate, and bend the interest of this country entirely to the

^will of another; when all this, I say, is attended to, it is
impossible for us to say we stand on independent ground,

>jL impossible for a free mind not to see and to groan under the

JEFFERSON'S ECONOMICS AND POLITICS 435

bondage in which it is bound. If anything after this could V
excite surprise, it would be that they have been able so far
to throw dust in the eyes of our own citizens, as to fix on
those who wish merely to recover self-government the
charge of subserving one foreign influence, because they
resist submission to another." ^ ^

Surely no further citation of authority is necessary to V
show conclusively that Jefferson believed the agricultural
interest to be the very basis of the Republican party, al-
though he looked upon the petty merchants, tradesmen,
and mechanics^ as valuable recruits for that organization.
It is equally well established that Jefferson regarded the
larger capitalistic interests — the security holding, banking,
commercial, and manufacturing groups — as the economic
foundation of the Federalist party and the real enemy
against which the forces of the Republican party were to be
hurled. While it may not be profitable to join in an in-
terminable argument as to whether this constitutes an
economic "interpretation" of Jefferson's politics, men of
a practical turn of mind will be satisfied with its significance
in the world of fact.

It is now fully apparent from Jefferson's letters and other
writings that his sympathies and affiliations were with the
agrarian class and that he recognized the agricultural
interest as the main body of his party. To complete the v
circle of his system it is necessary to show that he and his
party consciously directed their public policies toward the
satisfaction of the demands of that interest, of course, within
the limits of practical politics. In directing our inquiries

1 Works (Washington ed.), Vol. IV, p. 173.

« The term " mechanic" was then applied to the carpenter, blacksmith, and
other village workmen and was somewhat sharply distinguished from the term
" artisan" which was reserved for the mass of workmen in cities.

436 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

to this branch of the subject we must remember, however,
that we are now deahng with Jefferson in a responsible
official position, not merely with the partisan leader con-
cerned primarily in stirring the agrarian masses to action.
We should naturally expect less precision and clarity in his
public utterances ; but we are not surprised to find him
expressing privately to his friends his solicitude for the
concerns of the class that installed him in power.

For example, when Dupont de Nemours suggested to
Jefferson that his message of December, 1801, to Congress
might call forth objections worthy of consideration, the
President replied that he did not have the city dwellers
particularly in mind when he wrote the document in ques-
tion, but was directing his appeal to the agricultural popu-
lation with whose sentiments he was well acquainted.
"Placed as you are in a great commercial town," Jefferson
said, "with little opportunity of discovering the dispositions
of the country portions of our citizens, I do not wonder at
your doubts whether they will generally and sincerely con-
cur in the sentiments and measures developed in my mes-
sage of Jany 7 [sic]. . But from 40 years of intimate conver-
sation with the agricultural inhabitants of my country, I
can pronounce them as different from those of the cities, as
those of any two nations known. The sentiments of the
former can in no degree be inferred from those of the latter.
'^ . . . The majority of the present legislature are in unison
with the agricultural part of our citizens, and you will see
that there is nothing in the message to which they do not
accord. Some things may perhaps be left undone from
motives of compromise for a time, and not to alarm by too
sudden a reformation, but with a view to be resumed at
another time. . . . When this government was first estab-
lished, it was possible to have kept it going on true principles,

JEFFERSON'S ECONOMICS AND POLITICS 437

but the contracted, English, half-lettered ideas of Hamilton,
destroyed that hope in the bud. We can pay off his debts
in 15 years : but we can never get rid of his financial system.
It mortifies me to be strengthening principles which I deem \
radically vicious, but this vice is entailed on us by the first
error. In other parts of our government I hope we shall be
able by degrees to introduce sound principles and make
them habitual. What is practicable must often control
what is pure theory." ^ ^

In this private letter we have the real key to Jefferson's v
public policies. His sympathies were with the agrarians,
but the capitalistic interests built up around Hamilton's
system could not be suddenly overthrown. Compromise
was therefore necessary, unpalatable as it was. Neverthe-
less the main lines of Republican policy were directed toward
the fulfilment of the promises made to the farmers —
particularly the pledge to reduce the burden of taxation
and the public debt. Gallatin, an old opponent of the \
Constitution and one of the most truculent enemies of the
funding system devised by Hamilton, was called to the post
of Secretary of the Treasury, and set himself to the task of
cutting away those features of the fiscal system which had
been most obviously irritating to the Republicans. The
student of the legislation of the period from 1801 onward
will readily recall the chief measures of the Jeffersonian
party. ^

The expenses of the federal government for military V
purposes were immediately pared down by a reduction of
the army to the footing of 1796. The construction of war
vessels, designed particularly by the Federalists to protect I
American shipping on the high seas and in all the markets
of the world, was discontinued. The new circuit courts

> Works (Ford ed.), Vol. VIII, p. 125.

438 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

^created by the Federalists and filled with good party mem-
bers were abolished and the "princely" salaries of the judges
covered back into the Treasury. Savings were made in a
few branches of the civil service, much to the pain of the

• Federalist office-holders at whose expense the tax-burdened
farmer was relieved. All in all, these reductions were very
considerable. The net expenditures for ordinary purposes,
exclusive of interest on the public debt, were brought down
from $7,500,000 for the fiscal year 1800 to less than
$5,000,000 for the next year, and for the three succeed-
ing years a reduction to about $4,000,000 annually was

Veffected.^

V' These economies made possible the abolition of the excise
duties which had been so thoroughly hated by the farmers,^
whose little distilleries were regularly visited by the tax-
gatherer. This was a bold and clever stroke on the part of
the Repubhcans. No more convincing evidence of the
solicitude of the party for agrarian interests could have been
devised. Of course, it was mildly suggested by the Fed-
eralists that a reduction might better be made in the taxes

' on the necessaries of life, hke tea, coffee, sugar, and salt,
than in those on a luxury like whiskey, but the Republicans
who made whiskey did not think it a luxury. At all events,
the tax on that commodity, falling as it did on thou-
sands of little distillers, was keenly felt, while the tax through
the customs-house was in no sense disturbing to the Re-
pubHcan conscience. So the tax which fell principally on
the small producing farmer was repealed and the more
impalpable tax on the necessaries of life remained un-

'^ouched.

While cutting down expenditures, the Republicans were

> Dewey, Financial History of the United Statet, p. 120.
« Above, pp. 248 ff.

JEFFERSON'S ECONOMICS AND POLITICS 439

able to make effective inroads upon the public debt which V
stood at $83,000,000 in round numbers in 1801. Year after
year it was steadily reduced until it stood at $57,000,000 in
1809 and at $45,200,000 in 1812. The only apparent extrav-
agance of the government under Jefferson's administration
was the purchase of Louisiana, but the acquisition of this
enormous domain of unsettled land at what was then con-
sidered a great sum of money was wholly in line with the
interests of the Jeffersonian party. It meant that many
generations would elapse before the vacant lands would be
all taken up and the people of the United States turned
from agriculture to the demoralizing and destructive pur-
suits of finance, manufacturing, and commerce. It was
more than acceptable to the slave-owning planters already
beginning to awaken to the inexorable demand for new
lands to exploit, which the rapid cropping system produced. ^
With all the economic interests of the agrarian party in
support of the purchase, it is not surprising that Jefferson
was able to overcome his scruples as to its constitutionality.
Finally we may enumerate among the chief measures
which followed the Repubhcan triumph, the abolition of
the United States Bank at the end of its charter period in
1811. Since the inauguration of that financial institution,
a large number of state banks had sprung up and they were
exceedingly jealous of the special privileges which it en-
joyed. Indeed many of the local banks were poHtical as
well as financial rivals of the central concern and its branches.
The opposition to a rechartering of Hamilton's bank was
too powerful to be overcome. Gallatin had discovered the .
financial and pohtical advantages of the institution and
favored its continuance, but he was overborne in the con-
test. It is true, the Repubhcans a few years later estab-
lished a second United States Bank, but that was only after

440 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

a bitter experience with state banking and after a trying
time with war finances.^

^ Although the leading measures of Jefferson's adminis-
tration were directly designed in the interest of the agrarian
party, it must not be thought that he was rash in advancing
his policies. When he came to the presidency, the Fed-
eralists were too strong to be brushed lightly aside. They

' had too large an economic power in the country to be
ignored, and Jefferson, as Hamilton remarked, was a prac-
tical man unwilling to sacrifice immediate political advan-
tages for a remote ideal. Instead of declaring a frontal
assault on the Federalists, he conciliated them, and as time
wore on he took a leaf from the book of their experience in

N/the use of the United States Bank for political purposes.
At the very outset he felt his way carefully. Take, for
instance, the first inaugural. Of course, the touch of the
theorist is there, for would not his followers scan every line

"^or words of comfort and good cheer? "A wise and frugal
government, which shall restrain men from injuring one
another, which shall leave them otherwise free to regulate
their own pursuits of industry and improvement, and shall
not take from the mouth of labor the bread it has earned.

• This is the sum of good government, and this is necessary
to close the circle of our felicities." Government banks,
funded debts with circulating money based indirectly
thereon and supported by government credit, protective
tariffs, and discriminating commercial regulations, the
objects of such bitter attacks during the campaign, of course,
were no part of a scheme of government which merely
restrained men from injuring one another and otherwise

' A fuller review of the political economy of the Republicans after the inaugural
of Jefferson will be given in a forthcoming volume on agrarianism and slavocracy.

JEFFERSON'S ECONOMICS AND POLITICS 441

left them free to follow their pursuits. Jefferson's broad
principle of laissez faire might be interpreted by any eager
disciple to mean war on the various Federalist fiscal
devices; but it is immediately counterbalanced by a guar-
antee of "the honest payment of our debts and sacred ^
preservation of the public faith ; encouragement of agri-
culture, and of commerce as its handmaid." The financial
system of Hamilton is to be strictly upheld and commerce
is to receive protection. Well might Jefferson exclaim,
"We are all Republicans — we are all Federalists." Why^
should Federalists not be Republicans if they ask for
bread and receive it ?

When the Inaugural was published, many leading Fed-
eralists made fun of the grammar, but rejoiced in the doc-
trines. Almost immediately, the doughty old warrior,
Henry Knox, wrote to Jefferson congratulating him on his
splendid appreciation of "the motives of the two parties" ;
and while avowing his political enmity, he assured the new
President of his high esteem. "The great extent of our
country and the different manners of the respective parts,"
concluded Knox, "claim forcibly the superintendence and
direction of an enlarged mind to consolidate the interests
and affections. And if you should happily affect this much
to be desired object, an imperishable fame will be attached
to your character." ^

i"I cannot refrain from expressing to you the heartfelt satisfaction I have
experienced in perusing your address of the 4th of the present month. The just
manner in which you appreciate the motives of the two parties which have divided the
opinions, and which sometimes have seemed to threaten to divide the territory and
government of the country ; and the strong incitement you display for cementing
more closely our union, the essential principle of our prosperity, evince conspicu-
ously at one view your intelligence, patriotism and magnanimity. . . . The re-
spect and attachment however, that I have ever entertained for you, enhanced by
your acquaintance and confidence have never been in the least impaired. The
great extent of our country, and the differest manners of the respective parts claim
forcibly the superintendence and direction of an enlarged mind to consolidate their
interests and affections. And if you should happily affect this much to be desired

442 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Some months after this auspicious and conciUatory
beginning, Jefferson set about the preparation of his first
message to Congress. Although the draft of that important
paper may have been sketched in the quiet study at Mon-
ticello, it is certain that the philosopher-statesman was
unwilling to risk his personal views until they were tried
out on the practical men around him.

One of Jefferson's most trusted advisers was his Attorney-
General; Levi Lincoln, of Massachusetts, and to him the
new President sent a draft of his proposed message. Although
the paper which Jefferson placed in Lincoln's hands does
not seem to have been preserved, the latter's interesting
notes on the draft are to be found in Jefferson's manuscripts
in the Library of Congress, and among other proposed
Changes is the suggestion that more attention should be
given to conciliating the manufacturing and commercial
interests. Lincoln's emendation of Jefferson's draft ran as
follows : " Considering the importance that agriculture and
. manufacture are to our country and the ideas too prevalent
in the northern states, that the administration and the
southern states are hostile to our navigation and commerce,
quere if it would not have a good effect to add to the address
some such general expressions as the following, viz. — 'It is

object an imperishable fame will be attached to your character." H. Knox, to
Jefferson (March 16, 1801). Jefferson Papers, 2d Series, Vol. XLVIII, No. 8.
On March 27, 1801, Jefferson replied to Knox : "I have received with great pleas-
ure your favor of the 16, and it is with the greatest satisfaction I learn from all
quarters that my inaugural address is considered as holding out a ground for con-
ciliation and union. I am the more pleased with this, because the difference of
opinion therein stated as to the real ground of the difference among us (to-wit,
the measures rendered most expedient by French enormities) is that which I have
long entertained. I was always satisfied that the great body of those called Feder-
alists were real republicans as well as Federalists. . . . Union is already effected
from N. York southwardly almost completely. In the N. England states it will
be slower than elsewhere from peculiar circumstances better known to yourself
than to me. But we will go on attending with the utmost solicitude to their
* interests and doing them impartial justice, and I have no doubt they will in time do
justice to us." Works (Ford ed.), Vol. VIII, p. 35.

JEFFERSON'S ECONOMICS AND POLITICS 443

with Congress to consider whether the agriculture and V
manufacturing of our country require immediate attention,
beyond the private patronage of individuals, and whether
any legislative efforts are necessary or practicable for '
securing, encouraging, or preventing the abridgment of
the carrying trade, particularly important to the prosperity
of the northern states.'" ^

It would seem that Jefferson heard the voice of the
commercial and manufacturing interests speaking through
Lincoln, and perhaps \e heard it gladly, for he had written
to Knox that in spite of the opposition to him in New
England ''we will go on attending with the utmost solicitude V
to their interests, doing them impartial justice, and I have i
no doubt they will in time do justice to us." ^ What hev
had written on the subject of commerce and manufactures
in his first draft, if he had written anything, we cannot say ;
but it would appear that he had not mentioned the subject,
for the other notes by Lincoln cite the specific paragraphs
to which they belong and this note on the protection of com-
merce and manufactures does not refer to any paragraph.
In fact, Lincoln distinctly speaks of "adding" his statement.
Under the circumstances the following passage in Jefferson's
first message may be tentatively attributed to Levi Lincoln's
plea for the conciliation of the special economic interests of
New England : "Agriculture, manufactures, commerce, and V
navigation, the four pillars of our prosperity, are the most
thriving when left most free to individual enterprise. Pro-
tection from casual embarrassments, however, may some- \
times be seasonably interposed. If in the course of your
observations or inquiries they should appear to need any
aid within the limits of our constitutional powers, your sense

' Jefferson Mss., 2d Series, Vol. LII, No. 15 (Library of Congreas).
'Above, p. 441, note.

444 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

of their importance is a sufficient assurance they will occupy
your attention. We cannot, indeed, but all feel an anxious
solicitude for the difficulties under which our carrying trade
will soon be placed. How far it can be reheved, otherwise
than by time, is a subject of important consideration."

A study of the two passages shows that Jefferson's tender
to the commercial and manufacturing interests was more
Vy skilful than that of Lincoln and less hable to offend the
N^grarian regions of the South. He starts out with the
broad principle of no government intervention, but modi-
* fies it by saying that "protection for casual embarrassments,
■^however, may be sometimes seasonably interposed." Lin-
coln bluntly suggests that it is for Congress to consider
whether agriculture and manufacturing require immediate
attention. Jefferson arrives at the same point by a circum-
» locution which rids himself of all responsibility in the
matter: "If in the course of your observations or inquiries
they should appear to need any a'id within the limits of our
constitutional powers, your sense of their importance is a
sufficient assurance they will occupy your attention."
Lincoln frankly suggests that Congress should consider
whether the carrying trade needs government aid, but
Jefferson modifies it by saying, "How far it can be reheved,
otherwise than by time, is a subject of important consider-
ation."

Though the evidence is not forthcoming, there is good
reason for believing that Jefferson's paragraph is built up
out of Lincoln's suggestions. Lincoln speaks of "the pri-
vate patronage of individuals" and Jefferson of "individual
enterprise." Lincoln suggests that it is for Congress to
consider whether the protection of agriculture and manu-
facturing requires "immediate attention"; and Jefferson
V says that if these interests appear to need aid, their impor-

JEFFERSON'S ECONOMICS AND POLITICS 445

tance is sufficient guarantee that they will "occupy" the ,
"attention" of Congress. Lincoln suggests that Con-v
gress should consider "whether any legislative efforts"
were necessary to encourage or prevent the abridgment of
the carrying trade; and Jefferson says that "how far it'^
can be relieved" is a subject of important consideration for
Congress. Interestingly enough, in the next to the final
draft (signed on the day it was sent to Congress) Jefferson I
had written "whether" the carrying trade can be relieved
is for Congress to consider, and then he made a subtle
change by substituting "how far," as if there was no doubt
in his mind that it might be relieved to a certain extent. **^

It was not merely the manufacturing and commercial in-V
terests that Jefferson sought to conciliate after his election.
It is true that he had spoken of the banks and public funds
as " a contrivance invented for the purposes of corruption " ; ^ I
but he was too shrewd an observer of the course of events
not to desire the support of the interests which he and his
partisans had so roundly denounced. He had assured the v
public creditors in his first inaugural, that they had nothing
to fear, and through the Secretary of the Treasury, Gallatin,
he soon began to conduct private negotiations with the
representatives of the fiscal interests, as he put it himself,
"to engage the individuals who belong to them in support
of the reformed order of things or at least an acquiescence
under it." ^ "^

The fact is that the local financial interests which hadV
sprung up widely throughout the country began to take ad-
vantage of what Jefferson called "the reformed order of
things" to secure charters from the Republican legislatures \
in several states ; and knowing full well how deeply dyed
with Federalism the United States Banks and its branches

» Above, p. 430. « Works (Ford ed.), Vol. VIII, p. 172.

446 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

*Vwere, Jefferson and his advisers deliberately adopted a

policy of manipulating the government funds in such a way

I as to build up local Repubhcan moneyed machines in order

to resist the force of the Federahst interests and provide

competitors that would give the Repubhcans the power in

'the economic world which they so earnestly desired. In

other words, they decided that the country could not be

ruled without the active support, or at least the acquiescence,

of the capitalistic interests.

That this was a conscious poUcy of Jefferson's adminis-

"^^^ration there can be no doubt. At first Jefferson was in-
cHned not to intermeddle with the banking interests. W^en
Gallatin wrote him on June 18, 1802, about a plan for re-
Ueving the Bank of Pennsylvania without ahenating the
United States Bank, Jefferson replied : "The monopoly of a
single bank is certainly an evil. The multiphcation of them

I was intended to cure it ; but it multipHed an influence of the
same character with the first, and completed the supplanting
the precious metals by a paper circulation. Between such
parties, the less we meddle the better." ^ In this case,
however, it should be remarked that the Bank of Pennsyl-
vania, which was applying for aid at the hands of the ad-
ministration in the form of deposits, was in a notoriously
bad financial condition, and non-intervention was ob-

"^viously the wisest thing.'

A few months later when the Baltimore Bank applied
to the administration for aid, Jefferson had either changed
his mind about the matter of poUcy, or the circumstances
were such as to lead him to favor the use of the government
funds for political purposes. On October 7, 1802, he wrote
Vto Gallatin: "The application of the Bank of Baltimore

> Works (Washington ed.). Vol. IV, p. 440.

* H. Adams, The Writings of Gallatin, Vol. I, p. 80.

JEFFERSON'S ECONOMICS AND POLITICS 447

is of great importance. The consideration is very weighty'^
that it is held by citizens, while the stock of the United
States Bank is held in so great a proportion by foreigners.
Were the Bank of the United States to swallow up the
others and monopolize the whole banking business of the
United States, which the demands we furnish them with
tend shortly to favor, we might, on a misunderstanding
with a foreign power, be immensely embarrassed by any
disaffection in that bank. It is certainly for the public
good to keep all the banks competitors for our favors by a
judicious distribution of them and thus to engage the indi-
viduals who belong to them in support of the reformed order
of things or at least in an acquiescence under it." ^ ^

The following year, Jefferson had fairly launched out on V
the policy of employing the government's power to detach
the banking interests from the Federalists and to fasten
them to the Republican party. Although he had treated
Hamilton's actions based on the identical principle as highly
corrupt and corrupting, Jefferson was conscious of the recti-
tude of his own intentions. The difference lay in the fact
that he was using the financial interests to support what he
called "the reformed order of things," and Hamilton had
used them for the benefit of the interests themselves and the j
. Federahst party. On July 12, 1803, Jefferson wrote to
Gallatin that he favored turning all the banks into Republi-
can banks and capturing the mercantile interest. In reply
to a communication about the Bank at Providence, Rhode
Island, which was a notorious Federalist stronghold,^ Jeffer-
son said : "As to the patronage of the Republican Bank at
Providence, I am decidedly in favor of making all the banks
Republican, by sharing deposits among them in proportion
to the dispositions they show; if the law now forbids it,

» Works (Ford ed.), Vol. VIII, p. 172. » See above, p. 379.

448 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

"^we should not permit another session of Congress' to pass
without amending it. It is material to the safety of Re-

I publicanism to detach the mercantile interest from its
enemies and incorporate them into the body of its friends.
A merchant is naturally a Republican, and can be otherwise

'^only from a vitiated state of things." ^

'V' Although Jefferson's use of the economic interests which
he had so vigorously denounced was probably not known to
Hamilton, the latter was highly gratified to find the new
J President unwilling to make any dangerous innovations in
the established fiscal system. In an address to the voters
of New York, in 1801, Hamilton rejoiced in the fact that
the change in the presidential oflSce promised no changes

i of great moment in economic affairs, and he found great
difficulty in discovering in Jefferson's policy anything worthy
of his heaviest batteries.^ "Happily for our country,"
declared Hamilton, "there has just beamed a ray of hope
that these violent and absurd notions [about the fiscal
system] will not form the rule of conduct of the person whom
the party have recently elevated to the head of our national
affairs. In the speech of the new President upon assuming
the exercise of his office, we find among the articles of his
creed, — ' the honest jpayment of our debt, and sacred pres-
ervation of the PUBLIC FAITH.' The funding system, the
national debt, the British treaty, are not therefore in his
conception abuses, which, if no longer to be tolerated,

> Works (Ford ed.), Vol. VIII, p. 252. This idea of fighting Federalist fiscal
interests by setting up Republican interests of a kindred nature appears as early as
July 3, 1792, in a letter from Jefferson to Madison in which he says: "It seems
nearly settled with the Treasury bankites that a branch shall be established at
Richmond ; could not a counter bank be set up to befriend the agricultural man by
letting him have money on a deposit of tobo. notes or even wheat for a short time
and would not such a bank enlist the legislature i» its favor and against the Treas-
ury bank?" Jefferson, Works (Ford ed.), Vol. VI, p. 97.

* See Hamilton's long criticism of Jefferson's message. Works (Lodge ed.),
Vol. VII, pp. 200 ff.

JEFFERSON'S ECONOMICS AND POLITICS 449

would be of course to be abolished. But we think our-
selves warranted to derive from the same source, a con-
demnation still more extensive of the opinions of our
adversaries. The speech characterizes our present govern- y
ment ' as republican in the full tide of successful experiment.'
Success in the experiment of a government is success in the
practice of it, and this is but another phrase for an adminis-
tration, in the main, wise and good. That administration
has hitherto been in the hands of the Federalists. Here
then, fellow citizens, is an open and solemn protest against
the principles and opinions of our opponents, from a quarter
which as yet they dare not arraign. In referring to this
speech we think it proper to make a public declaration of our
approbation of its contents. We view it as virtually a
candid retraction of past misapprehensions, and a pledge to
the community that the new President will not lend himself
to dangerous innovations, but in essential points will tread \
in the steps of his predecessors. In doing this, he prudently
anticipates the loss of a great portion of that favor which
has elevated him to his present station. Doubtless, it is
a just foresight. Adhering to the professions he has made,
it will not be long before the body of the Anti-Federalists
will raise their croaking and ill-omened voices against him.
But in the talents, the patriotism, and the firmness of the
Federalists, he will find more than an equivalent for all that
he shall lose." ^ Certainly, if the Federalists had actually
had a preelection arrangement with Jefferson, they could
not have won from him a clearer recognition of the in-
terests which they represented. Whether Jefferson ever
seriously contemplated a war on the great capitalistic in-
terests which he had so strenuously denounced, or later came
to reaUze the futility of such a campaign, or discovered

» Works (Lodge ed.), Vol. VII, p. 194. \

450 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

^how much easier it was to make use of them than to destroy
^them is a matter for interesting speculation. The im-
mediate outcome, however, was the same, whatever the
■^poUtical motive behind his poHcies.

Although it seems well established that Jefferson regarded
the party conflict which originated in Washington's adminis-
tration as a conflict of divergent economic interests and
conducted his campaign on that understanding, it appears
worth while to inquire into the validity of his oft-repeated
assertion that temperamental differences divided the parties,
the Federahsts "fearing" and the Repubhcans "cherish-
Ving" the people. That the former did truly regard with
misgivings any constitutional arrangements which would
vest in the whole body of adult males the power to rule
directly and simply on the mere majority principle, through
representative machinery, cannot be denied. The limited
suffrage, the check and balance system, the indirect method
of electing certain branches of the government, and special
property qualifications on the suffrage and office-holders
were the institutional devices which expressed their fear
of direct majority rule. But in this did the Federahsts differ
Nfrom the Repubhcans? The fleeting emotions which the
leaders of both parties entertained as they contemplated the
course of democracy are not recorded, but many of their
schemes of government, projected and realized, have come
down to us for study and analysis.
"^ It has been more than once said that Jefferson's confidence
vin the people is evidenced in his faith in majority rule.
The term was constantly on his hps ; it appears with striking
frequency in his public and private papers — particularly
V after his party became the majority in the nation. Until
1 his election to the presidency the will of the people had been

JEFFERSON'S ECONOMICS AND POLITICS 451

perverted by corrupt representatives, or at best the people
had been lulled into a false and deceptive security. After v
"the great revolution" of 1800, Jefferson spoke freely of "the
will of the people." In his first inaugural address, he placed
"absolute acquiescence in the decision of the majority"
as "the vital principle of republics, from which there is no .
appeal but to force, the vital principle and immediate
parent of despotism." In a letter written shortly afterward,
he declared the will of the people to be "the only legitimate
foundation of any government," and added that "to protect
its free expression should be our first object." ^ ^

But these are vague assertions with which the most ardent v
Federahsts could hardly have quarrelled. Everybody at the , j
time talked vaguely about the rule of the people, but no one ^
sought to explore all of its impUcations. When the mon-
archy was destroyed, there was no other basis of sovereignty I
than "the will of the people." Social and economic condi-
tions did not permit of any claims to rule on the part of
a legally recognized aristocracy. The sovereignty of the
king and parliament was gone, and a transfer to a popular
basis was inevitable. Every one agreed on that, but thev
agreement on such an obvious generality left unanswered
the far more significant question: "Wliat people and how
organized?" In fact no statesman at the time seems to
have considered that matter in the abstract. In forcing
the adoption of the national Constitution in the place of a
system which permitted the populations of the petty states
like Delaware and Rhode Island to have equal weight with ^
the populations of the great states like Virginia and Pennsyl-
vania, the Federahsts talked long and eloquently about | ^
majority rule, protesting that, on the principles of American
liberty and right reason, such glaring examples of minority

1 Wmhi (Washington ed.), Vol. IV, p. 379.

452 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Vrule as those afforded under the Articles of Confedera-
tion could not be tolerated. Yet when the same Feder-
alists were considering the evils inflicted upon property by-
popular majorities in state legislatures they were equally
vehement in their defence of the rights of minorities. The
Federalists' attitude toward majority rule depended wholly
upon the angle from which they viewed it.
I In this regard it is difficult to see just wherein Jefferson
and his party differed from the Federalists. In fact, when
speaking of the will of the people in his first inaugural,
Jefferson was careful to add "according to the rules of the
Constitution" — rules which prevented simple majority
government by giving states (not people) equal representa-
tion in the Senate, the South representation in the House
for its slaves, the President, indirectly elected, a veto
over acts of the legislature, and the judiciary control over

vlegislation. With the Federalist system of "refining popular
will," to use the phrase of Madison (on whose shoulders
Jefferson placed his mantle) or, to speak accurately, prevent-

ving simple majority rule, Jefferson had no quarrel. His

letters written at the time of the formation and adoption

J of the Constitution show that he approved the general

structure of the government based on the check and balance

principle, favored giving the judiciary an express veto

vpower, and shared Federalist distrust of the legislature.^

1 Jefferson's chief objection to the federal Constitution as drafted at Philadel-
phia was the absence of a bi^l of rights securing personal and property rights from
federal interference save in accordance with time-honored Anglo-Saxon usages.
The check and balance idea upon which the Constitution was based, he cordially
approved. Writing to Madison from Paris, on December 20, 1787, he said: "I
like the organization of the government into Legislative, Judiciary, and Executive.
. . . And I like the negative given to the Executive with a third of either house,
though I should have liked it better had the judiciary been associated for that
purpose, or invested with a similar and separate power." Writings (Ford ed.).
Vol. IV, pp. 475-476. It is thus apparent that Jefferson went further than Hamil-
ton in hie doctrine of judicial control, for under his scheme the judges could veto
laws on grounds of policy as well as law. This principle he wished to see

JEFFERSON'S ECONOMICS AND POLITICS 453

In fact, the constitutional amendments on behalf of private V
rights, which he did so much to secure, Hke all other con- ,
stitutional limitations, were an expression of distrust and
fear of the legislative branch of the government. '^

Nevertheless, he went so far as to say that the fundamental V
difference between the FederaHsts and the Republicans was
over the respective powers to be enjoyed by the executive
and the legislative departments of the government.^ The
former, he said, were inclined to support the executive
branch at the expense of the legislative department, while |
the Republicans were by principle committed to the view
that the legislature was the more appropriate depository of
pubHc confidence. This view was commonly circulated
throughout the country and on the basis of this distinction
the FederaHsts were branded with having "monarchical"
tendencies as contrasted with the "democratic" tendencies
of the Republicans. *^

Yet, if we search for any extraordinary deference on the^
part of Jefferson to legislative will we shall hardly find it.
It is true that as President he did not exercise the veto power,
but on no fundamental matter did he differ from the legisla-
ture controlled by his party and under his leadership. What
he might have done had he found himself confronted by a
Federalist legislature bent on capitaHstic and commercial
policies which he did not approve, we can only conjecture. V
Nevertheless we may draw some conclusions from the fact

written into the federal Constitution. That the judiciary would exercise a
control over the legislature under the Constitution as drafted he clearly under-
stood, for he favored a bill of rights because of "the legal check which it puts into
the hands of the judiciary." Ibid., Vol. V, p. 81.

1 "I consider the pure federalist as a republican who would prefer a somewhat
stronger executive ; and the republican as one more willing to trust the legislature
as a broader representation of the people and a safer deposit of power for many
reasons. But both sects are republican, entitled to the confidence of their fellow
citizens. Not so their quondam leaders, covering under the mask of federalism
hearts devoted to monarchy." Works (Ford ed.), Vol. VIII, p. 76.

454 ECONOAIIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Vthat Jefferson believed in the power of the courts to declare

acts of Congress null and void and that he even went so

^ far as to hold that the President had the constitutional right

to pronounce invahd acts of Congress duly signed by his

t^ predecessor.

This fact is not commonly known, or is not known at all,
but it can be proved by reference to the draft of Jefferson's
first message to Congress, signed by him on December 8,
1801. This draft lies among his papers preserved in the
Library of Congress and in it appears the following astound-
ing passage which, for some reason, was struck out of the
document at the last moment, just before it was sent to
Congress: "Our country has thought proper to distribute
the powers of its government among three equal and inde-
pendent authorities constituting each a check upon one or
both of the others in all attempts to impair its constitution.
To make each an effectual check it must have a right in
' cases which arise within the line of its proper function,
where equally with the others, it acts in the last resort and
without appeal, to decide on the validity of an act according
to its own judgment and uncontrolled by the opinions of any
other departments. . . . On my accession to the adminis-
tration, reclamations against the sedition act were laid
before me by individual citizens claiming the protection
of the Constitution against the sedition act. Called on by
the position in which the nation had placed me to exercise
in their behalf my free and independent judgment, I took
that act into consideration, compared it with the Con-
stitution, viewed it under every respect of which I thought
it susceptible, and gave it all the attention which the magni-
tude of the case demanded. On mature deliberation, in the
presence of the nation and under the solemn oath which
binds me to them, and to my duty, I do declare that I hold

JEFFERSON'S ECONOMICS AND POLITICS 455

that act to be in palpable and unqualified contradiction to \
the Constitution. Considering it then as a nullity, I have
relieved from oppression under it those of my fellow citizens
who were within the reach of the functions confided to me. ^
In recalling our footsteps within the limits of the Constitu-
tion, I have been actuated by a zealous devotion to that
instrument." ^

Why Jefferson cut this passage out of the draft on the v
eve of sending it to Congress is a subject for interesting con-
jecture. But it does not matter what the motive, it is clear
that he was prepared to set himself up as a sort of high tri-
bunal and declare null and void, as unconstitutional, an
act of Congress, duly passed and approved. That he treated
the law in fact as null and void by refusing to execute
it against his friends is well known, but that he was \/
prepared to do what John Marshall did two years later in
Marbury v. Madison has apparently escaped the historians
who write their books from printed documents. It would
have been interesting to have read the comments of those
newspapers which had been exalting the legislative branch
of the government if Jefferson had let that passage stand in
his message.

This proposal solemnly to annul the sedition law, passed V
by an undoubted majority "according to the rules of the
Constitution," is an evidence that he was as little ready &s\^<'^j
any one "to acquiesce in the will of the majority" when that ' "
will conflicted with his views of sound public policy. In \
fact, as if dimly aware of his inconsistency on this point,
Jefferson was quick to add, in his first inaugural, a limitation
on the principle of obedience to the majority. "All too will
bear in mind this sacred principle that though the will of

' Jefferson Papers, lat Series, Vol. VIII, No. 252. This draft signed by Jefferson.
Decembers, 1801.

456 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

Mhe majority is in all cases to prevail, that will, to be rightful,
must be reasonable ; that the minority possess their equal
rights, which equal laws must protect, and to violate which

' would be oppression."

The only part of the Federal government which Jefferson
and his party vigorously attacked was the judicial branch.
They destroyed the new circuit courts created by Congress,
but those positions were filled by the most relentless foes of
RepubHcanism that John Adams could discover throughout
the whole American empire. With Jefferson's sanction

j his party waged war pubUcly and privately upon the
Supreme Court of the United States, but that eminent tri-
bunal was under the dominion of perhaps the most cordially
hated Federahst in the country, John Marshall. If Jeffer-
son had not indorsed judicial control before he found him-
self thwarted by it, we might more readily accept the pleasing
theory that in warring upon Marshall he was fighting the
battle of "the people" against "judicial oligarchy." By a
sort of poetic justice, the party which Jefferson led against
the Supreme Court with such vigor, long afterward looked
upon the Dred Scott decision, pronounced it good, and
solemnly declared in its platform that it would abide by
the decisions of the Supreme Court in "all questions of

"^constitutional law " !

><■ It would appear that in the field of federal law and politics,
the conflict between the RepubHcans and the Federalists
was over economic issues and not over any nice readjust-
ments of the Constitutional system with a view of making

* it more amenable to simple majority rule. It may be said,
however, that the national system was by the nature of cir-
cumstances necessarily a compromise and therefore built
\l upon no consistent theory of constitutional democracy.
vAccepting this for the sake of argument, we may turn to

JEFFERSON'S ECONOMICS AND POLITICS 457

an examination of Jefferson's doctrines for the government
of commonwealths where no questions of large and small
states entered to complicate the simple problem of forming
the constitutional structure.

Fortunately we have ample materials from Jefferson's
pen on this point of state constitutions, and the develop-
ment of constitutional democracy in the Republican states
can be traced with precision. Jefferson was not a member -
of the Virginia convention of 1776 which drafted the con-
stitution of the commonwealth. He was at that time
serving in the national Congress at Philadelphia, but he
drew up a plan for the guidance of his fellow-citizens, which,
although it did not reach them in time to be made the basis
of their new scheme of government, reveals his leading ideas
as to the exact manner in which " the people " were to rule.^

In providing the basis of the government Jefferson thought V
it wise or expedient to stipulate that only those males
"having a freehold estate in one quarter of an acre of land
in any town or twenty-five acres in the country," or those
who had paid scot and lot to the government for the two pre-
ceding years should enjoy the right to vote, for members of
the lower house of the state legislature. This was a broader \
suffrage than the convention decided upon, and Jefferson
would have made it practically manhood suffrage by requir-
ing the government of the state to grant to non-landholders
small estates out of the public domain. Thus he would have
made land the basis of the government, but he would have ^ /'
widened it as far as possible by making all males landholders. \X
This was in harmony with his theory that small farmersji
were the safeguard of republican institutions. fj

With reference to the structure of the government, Jeffer-

1 Jefferson's plan is in Works (Ford ed.). Vol. II, p. 7. C. R. Lingley, Transition
in Virginia from Colony to Commonwealth, Chap. VII (Columbia University Studies).

458 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

^son provided for direct election of only the lower house of
the legislature — to be chosen annually. He proposed that
the senators should be chosen by the lower house, and he
at first advanced the proposition that they should enjoy a life
tenure, but this he later modified in favor of a nine-year term.
To refine popular whims he provided that only one-third of
the senators should go out every three years, thus prevent-
ing a complete renewal of the government at one election.

The executive branch of the government Jefferson made
subordinate to the lower house by providing that the "ad-
ministrator" should be chosen annually by that body and
checked by a privy council likewise selected by that chamber.

'; The judiciary he removed as far as possible from direct
\ ! election. The county judges were to be appointed by the

j administrator and the privy council and to be removable
only by the court of appeals. The judges of the general
court and high court of chancery were to be appointed in
the same manner, to hold oSice during good behavior, and
to be removable by the court of appeals for cause. The
judges of the court of appeals were to be selected by the
lower house of the legislature, to serve during good behavior,
and to be recalled only by act of the legislature.

In commenting upon this plan of government, Mr. W. C.
Ford remarks : "It would naturally be expected that Jeffer-
son would favor a democratic constitution — one, that is,
which embodied the idea that ali powers rested with the
people ; yet his plan was less democratic than the instrument
\ adopted by the convention, for he would allow the people
to participate directly only in the election of the lower house
of the Assembly. All else was based upon this narrow foun-

>^dation." '

> The Nation, Vol. LI, p. 108. Jefferson considered it the normal function of
the judiciary to declare void any law contrary to a formally drawn conBtitution.
Works (Washington ed.), Vol. IX, p. 290.

JEFFERSON'S ECONOMICS AND POLITICS 459

Deeply as Jefferson cherished the people, he was as fearful V
as any Federalist of "the despotism of elected persons."
His chief objection to the Virginia constitution was its vest-
ing of extensive powers in the legislature. "The concentrat-
ing these in the same hands," he says, "is precisely the
definition of despotic government. It will be no allevia- i
tion that these powers will be exercised by a plurality of
hands, and not by a single one. One hundred and seventy-
three [legislative] despots would surely be as oppressive as
one. Let those who doubt it turn their eyes on the republic
of Venice. As little will it avail us that they are chosen by
ourselves. An elective despotism was not the government
we fought for." ^ This is just the danger that Madison, V
Jefferson's chosen successor, feared, when he wrote, in 1788,
to the latter: "Wherever the real power in a government
lies, there is the danger of oppression. In our Govern-
ments, the real power lies in the majority of the community,
and the invasion of private rights is chiefly to be apprehended, ^ -
not from acts of Government contrary to the sense of its
constituents, but from acts in which the government is
the mere instrument of the major number of the con-
stituents." ^

The fact is that, notwithstanding his generous use of the V
phrase "popular rule," Jefferson was as anxious as any
Federalist to guard against "the tyranny of majorities,"^
and like that stanch Federalist, Charles Coatesworth Pinck-
ney, he thought a good senate representing wealth was a
desirable feature of constitutional government. Comment- t
ing on the Virginia legislature, he says : " The senate is, by
its constitution, too homogeneous with the house of delegates.
Being chosen by the same electors, at the same time, and

« Works (Washington ed.). Vol. VIII, p. 361.

* Documentary History of the Constitution, Vol. V, p. 88.

• Works (Ford ed.), Vol. V, p. 83.

460 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

'Vout of the same subjects, the choice falls of course on men of
the same description. The purpose of estabUshing different
houses of legislation is to introduce the influence of different
interests or different principles. ... In some of the
American states, the delegates and senators are so chosen,

I as that the first represent the persons, and the second the
property of the state. But with us [in Virginia] wealth and
wisdom have an equal chance for admission into both houses.
We do not, therefore, derive from the separation of our
legislature into two houses those benefits which a proper
comphcation of principles are capable of producing, and
those which can alone compensate the evils which may be

"Vproduced by their dissensions." ^

"^ When, however, Jefferson was called upon a few years
later to draft another plan of a constitution for the state of
"Virginia, he did not introduce this idea of differentiating
between the senate and the lower house on the basis of
wealth. Instead he proposed to refine the popular will by
having the senators chosen indirectly by electors chosen
by the voters. The selection of the judges of the high and

i supreme courts of the state he would have vested in the
legislature and their term of office he would have made "dur-
ing good behavior." As a check upon the legislative branch
of the government, he suggested a council of revision com-
posed of the governor, two councillors of state (the gover-
nor and council to be elected by the legislature), and three
judges of high courts, and invested with the power of re-
jecting measures of the legislature, subject to the provision
that any measure so rejected might be enacted into law by

V a two-thirds vote.^

> Works (Washington ed.). Vol. VIII, p. 361.

» This plan was drawn up in the summer of 1783 when it was thought that a
convention would soon be called to draft a new constitution for Virginia. The text
is in Jefferson's Works (Washington ed.), Vol. VIII, pp. 441 ff.

JEFFERSON'S ECONOMICS AND POLITICS 461

In his plan of 1783/ however, Jefferson did propose a V
wider suffrage than in 1776, for he suggested that the
ballot should be given to all free males who possessed a
certain amount of real property or who had served in the
militia.^ In 1800 he declared that had he been in the
Virginia constitutional convention he would "probably have
proposed a general suffrage" and from time to time there-
after he expressed himself in favor of general manhood
suffrage. In taking this advanced step he was not followed
at all by the Repubhcan party in Virginia, and more than
half a century after the Declaration of Independence we
find the non-freeholders of Virginia petitioning for the right
to vote, but in vain. The doctrine of universal manhood
suffrage was academic with Jefferson^ and was not generally
accepted by his party during his hfetime. In fact, the
South was most tenacious in holding to property quahfi-
cations. V

There was one point, however, on which Jefferson differed v
from most of his contemporaries ; he beheved that state
constitutions should not go into effect until ratified by
popular vote. He accordingly proposed in 1776 that the
constitution based on his draft "shall be referred by them
[the convention] to the people to be assembled in their
respective counties ; and that the suffrages of two-thirds

1 Works (Washington ed.), Vol. VIII, p. 444.

' Jefferson's plan for a constitution usually placed under the date of 1794 was a
fantastic affair and its purpose is unknown. It may be neglected so far as its prac-
tical bearings are concerned. The Nation, Vol. II, p. 107.

» Jefferson's view as to the possibility of woman suffrage is curious and interest-
ing. He said: "Were our state a pure democracy, in which all its inhabitants
should meet together to transact all their business, there would yet be excluded from
their deliberations, 1. infants until arrived at years of discretion. 2. Women,
who, to prevent depravation of morals and ambiguity of issue, could not mix pro-
miscuously in the public meetings of men. 3. Slaves." Works (Washington ed.),
Vol. VII, p. 36. Contrary to popular impression, Hamilton believed in universal
manhood suffrage for the lower house of the national legislature and like Jefferson
relied on adequate checks in the other branches of the government.

462 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

^of the counties shall be requisite to establish it." Jefferson
looked upon a constitution as a fundamental law, as a
solemn compact controlling the legislature and not subject
j to alteration by mere majorities ; for his plan of govern-
ment provided that amendments to the constitution 'must
be approved by the voters of two-thirds of the counties.
The Virginia convention of 1776 did not accept Jefferson's
plan for requiring popular ratification, and seven years
later the supreme court of the state held that acquiescence
in the constitution by the people was itself ratification.^

We may now sum up the conclusions as to Jefferson's
political philosophy on the basis of the evidence here pre-
sented :
V He clearly recognized the antagonism between the capi-
I talistic and agrarian interests and frankly declared that the
I former was the basis of the Federalist party and the latter
j the basis of the Republican party.

As the leader of the latter party he made a distinct appeal
to the agricultural interests granting only those concessions to
the capitalistic interests which he, as a practical man, deemed
necessary.

The Constitution with its elaborate system of checks and
balances, indirect election and judicial control, designed to
soften the rigors of popular rule, Jefferson claimed as a
Republican not a Federalist instrument of government.

In designing state constitutions, Jefferson nowhere com-
mitted himself to simple majority rule through representa-
tive institutions.

He was in favor of judicial control over legislation as a
principle, but was led to modify his views by his practical
experience at the hands of his bitter political enemy, Chief
Njustice Marshall.

> Lobingier, The People's Law, p. 145.

JEFFERSON'S ECONOMICS AND POLITICS 463

He accepted the Federalist principle and practice ofV
distrusting the intelligence and character of the section of
the people that was opposed to him. The Federalists
distrusted the fiat-money agrarian party, and Jefferson
distrusted capitalists and the "mobs of the great cities." /'^

Early in his career he proposed property qualifications ^-'•^-^
on the suffrage but he later came to believe in the theory of
a wide suffrage, extended to all men who paid taxes or
served in the militia. But this was an academic matter *
with him, for neither he nor his party regarded universal
manhood suffrage as an essential element of Republican .
faith. Among the very last states to surrender the domin-
ion of the landed class, based on freehold property qualifi-
cations on the suffrage, were Jefferson's own state, Virginia,
and the neighboring commonwealth of North Carolina.
In fact, a study of the history of the suffrage in the Re-
publican and the Federalist states shows that the former were
no more enamored of an equalitarian political democracy
than the latter. Long after Jefferson's death, the slave-
owning planters of the South ruled by virtue of their superior ^
wealth and talents and buttressed their natural power by
property qualifications either on the suffrage or office-
holding or both.-^ ^

^ This restriction of popular rule by one form of property qualification or another
was the subject of frequent commentary by the more radical sections of the Re-
publican party, but these sections had no very great influence in the councils of the
party in the first two decades of its organization. For example, a Maryland pam-
phleteer in 1806 makes the following remarks on the "strange inconsistency" of
Virginia as well as his own state : " Maryland has of late years progressed consider-
ably in her advances towards a pure and simple form of Republican Government :
she has proclaimed universal suffrage to all her citizens who have attained the years
of majority. She has one step further to go, and that is to declare all electors
capable of being elected to any office in the state. Property, under every form of
government, will retain fully more than its just weight ; the rich man, when in com-
petition with a poor man of equal merit, will most generally be successful. Why
then grant wealth additional influence in society. . . . By the Constitution of
this state it is required that to render a citizen capable of being elected to certain
offices, he must be worth so many hundred pounds current money. A member to

464 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY
GENERAL CONCLUSIONS

No one can spend the leisure of several years in the study
of the period which saw the formation of the Constitution
and the rise of Jeffersonian democracy without arriving at
certain general reflections, which may or may not be worthy
of the name conclusions, concerning the drift of events.
Such conclusions as have been reached in the course of
preparation of the essay on the Constitution and this
volume are here set down for whatever value they may
have. No pretence is made to infallibility, but there appears
to be satisfactory historical evidence to support them.

It is established upon a statistical basis that the Consti-^
tution of the United States was the product of a conflict
between capitalistic and agrarian interests. The support
for the adoption of the Constitution came principally from
the cities and regions where the commercial, financial,
manufacturing, and speculative interests were concentrated

the House of Delegates, for instance, must be worth five hundred pounds. . . .
He who is free from debt, he who though counted poor by society in general, is as
independent of the world as the world is of him ; and Maryland can boast of her
thousands who may be ranked in this list ; industrious farmers and mechanics
who render her more real service and do her more real honor than all of the over-
grown rich men in the state. And here let me ask a question : is the majority of
the citizens of Maryland worth five hundred pounds current money each? If
they are the state is much richer than I supposed ; but if the reverse is the case,
then a majority of the people are actually excluded from a participation in the gov-
ernment, excluded even from the lowest grade of public offices. ... I cannot
here pass over in silence the strange inconsistency exhibited in Virginia [where only
freeholders may vote], a republican state in the gross, yet leaning to aristocracy in
detail. Is there no industrious patriot in that state, who will bring forward an
elective system more in unison with the principles of republicanism? Now is the
time. . . .

"In regard to the election of governor, I can see no substantial reason why he
.should not be elected by the voice of the people as ' every remove from the voice of
the people is a departure from the principles of Republicanism,' besides in ten of
the states, viz. in Massachusetts, Connecticut, New Hampshire, Rhode Island,
Vermont, New York, Pennsylvania, Delaware, Kentucky and Tennessee, gover-
nors are chosen by the people at the same time that elections are held for other
purposes." An Address to the People of Maryland (1804) [by R. Smith?] (Duane
Collection, Library of Congress, Vol. 116, No. 7).

JEFFERSON'S ECONOMICS AND POLITICS 465

and the bulk of the opposition came from the small farm-
ing and debtor classes, particularly those back from the
sea board.

The capitalistic interests whose rights were especially-
safeguarded by the Constitution had been harried almost
to death, during the few years preceding the adoption of
the Constitution, by state legislation and by the weaknesses
and futility of the government under the Articles of Con-
federation. They were, therefore, driven into a compact
mass, cemented by a conscious solidarity of interest. In
the contest for the Constitution, they formed the aggressive
party, and though a minority of the nation, they were able
to wring from the reluctant voters a ratification of the new
instrument of government, because the backwoods agrarians
were uninformed and indifferent and from two-thirds to three-
fourths of the electorate failed to vote one way or the other
on the Constitution. In other words, though numerically
in a minority, the party of the Constitution was able by
virtue of its wealth, talents, solidarity, and political skill to > /
carry through ratification in the face of a powerful opposi-
tion representing very probably the majority of the country.

The men who framed the Constitution and were instru-
mental in securing its ratification constituted the dominant
group in the new government formed under it, and their
material measures were all directed to the benefit of the —
capitalistic interests — i.e., were consciously designed to
augment the fluid capital in the hands of security holders
and bank stock owners and thus to increase manufacturing,
commerce, building, and land values, the last incidentally,
except for speculative purposes in the West. The bulk of
the party which supported these measures was drawn from
the former advocates of the Constitution.

The spokesmen of the Federalist and Republican parties,
2h

466 ECONOMIC ORIGINS OF JEFFERSONIAN DEMOCRACY

I ^Hamilton and Jefferson, were respectively the spokesmen
X I of capitalistic and agrarian interests. Their writings

afford complete and abundant proof of this fact.

"^ The party of opposition to the administration charged
the Federalists with building up an aristocracy of wealth
by the measures of the government and appealed to the
mass of the people, that is, the farmers, to resist the exac-
tions of " a moneyed aristocracy." The Republicans by thus
declaring war on the rich and privileged drew to themselves

' the support not only of the farmers, but also of a consider-
able portion of the smaller tradesmen and mechanics of the
towns, who had no very great liking for the "rich and well
born." By the ten years' campaign against the ruling
class, they were able to arouse the vast mass of the hitherto
indifferent voters and in the end swamp the compact mi-

'^nority which had dominated the country.

Jefferson was peculiarly fitted to become the leader of the

■Opposition party. He was a planter and thus regarded as
the spokesman of the agrarian interest. As a slave-owner
and member of the ruling aristocracy in Virginia he con-
ciliated that portion of the South which might have been
disturbed by some of the violent democratic theories associ-
ated with his name. He had taken no part in the
making and ratification of the Constitution, and it was
known that he gave aid and comfort to the opponents of

/ ratification while avowing his approval of certain parts of
that instrument of government. He was known to oppose
slavery in theory, but his agents skilfully spread abroad
his statement that the federal government could not
interfere with that peculiar institution under the powers
conferred upon it by the Constitution. In private corre-
.-, spondencc, Jefferson had vigorously denounced the bank
J and funded debt as schemes for robbing the agrarian

JEFFERSON'S ECONOMICS AND POLITICS 467

interests, and his views were widely circulated by his friends
and enemies. But he did not commit himself to any radical V
schemes for repudiation or irregular reduction and upon his
election he skilfully used and conciliated the very classes
that he had denounced. His academic views assiduously i
circulated by his partisans pleased the temper of the agrarian
masses, and his practical politics propitiated, rather than
alienated, the capitalistic interests. ^

Jeffersonian Democracy did not imply any abandonment '^
of the property, and particularly the landed, qualifications
on the suffrage or office-holding ; it did not involve any
fundamental alterations in the national Constitution which
the Federalists had designed as a foil to the levelling pro-
pensities of the masses ; it did not propose any new devices
for a more immediate -and direct control of the voters over
the instrumentalities of government. Jeffersonian De-
mocracy simply meant the possession of the federal govern-
ment by the agrarian masses led by an aristocracy of
slave-owning planters, and the theoretical repudiation of the
right to use the Government for the benefit of any capital-
istic groups, fiscal, banking, or manufacturing. >•

INDEX

Adams, Charles F., on economic
nature of the constitutional con-
flict, 8

Adams, H., Federalism in New Eng-
land, 16

Adams, John, supposed sympathy
with Jefferson, 58 ; political econ-
omy of, 299 &. ; Taylor's attack
on, 323 ff . ; retirement of, 353

Agrarianism, politics of, 322 ff.

Agriculture, opposition to protec-
tion, 162 ; against capitalism,
216, 227 ; predominance not
threatened, 232 ; resistance to tax
on whiskey, 250 ff. ; attacks on
Jay treaty, 293 ; the real basis of
democracy, 347

Alien and sedition acts, 356 f.

Ames, on nature of the conflict over
the Constitution, 6 f . ; on assump-
tion, 147 ; favors the bank, 155 ;
on origin of parties, 242 ff.

Anti-Federalists, Libby on origin,
12 ff. ; and opponents of Consti-
tution, 74 ; resistance to taxation,
248 ff.

Assumption, in Congress, 133 ff. ;
debated in the House of Repre-
sentatives, 146 ff. ; Jefferson's
account of, 168 ff. ; Federalist
support of, 222 ; see Debt

Baldwin, Abraham, politics of, 34, 99
Bancroft, on the nature of the con-
stitutional conflict, 2
Bank, United States, and parties,
111; nature of, 114; Hamilton's
report on, 118; debate in House
of Representatives on, 152 ff. ;
and the federal Constitution,
157 ff. ; stockholders in Con-
gress, 166 ff. ; Taylor's attack on,

207 ff . ; a tax on land and labor,

336 ff. ; directors selected from

the North, 392
Bassett, J. S., views on early parties

discussed, 10 ff.
Bassett, Richard, politics of, 35, 99
Bayard, James A., and the election

negotiations of 1800, 408 ff.
Bedford, Gunning, polities of, 36
Blair, John, politics of, 36
Blount, William, poUtics of, 37
Boston, vote in, 29 ff.
Boudinot, opposes discrimination in

payment of debt, 144
Brearley, David, 38
Broom, Jacob, 38
Burr, and the election contest of

1800, 401 ff. ; regarded as friendly

to capitalism, 403
Butler, Pierce, politics of, 38, 99

Callender, on the Constitution, 79 ;

on Washington, 81 ; attack on

the security holders, 212
Capital, Federalist plans for infla-
tion, 116 ff, 136
Capitalism, methods of, 113 ff . ;

relative weight of, 219 f . ; and

British trade, 276 ; Taylor on the

politics of, 325 ff. ; see Hamilton

a?id Jefferson
Carroll, Daniel, 39, 99
Class conflict, the basis of politics,

300 ff. ; in the United States,

326 ff.
Clymer, polities of, 39, 99; favors

protection, 163
Commerce, and the Constitution, 7 ;

indorsement of Jay treaty, 289 ff . ;

and land and labor, 340
Congress, early party divisions in,

15 ; discussion of Hamilton's

469

470

INDEX

system, 132 ff. ; members of,
holding securities, 165 ff., 200 ff.

Connecticut, first elections under
the Constitution, 96 ; and secur-
ity holding, 182 ; the economics
of the conflict of 1800 in, 361 ff . ;
John Adams on class rule in, 365

Constitution, the federal, economic
nature of conflict over, 1 ff. ;
property interests support, 5 ;
opposition to, and Anti-Federal-
ism, 75 ; putting into effect of,
86 ff. ; opponents of and the first
elections, 93 ; opponents of in
first Congress, 101 ; in operation,
108 £f. ; and the bank bill,
157 ; violated by fiscal measures,
210 ; ratification of compared
with vote in 1800, 393 £f. ; sup-
porters and opponents of and
representation in the seventh Con-
gress, 396 ff.

Convention, constitutional, political
affiliation of members, 34 ff. ;
statistics of, 73 ; constitutional,
members of in first government,
99 ff.

Credit, Hamilton's report on, 117,
125, 130 ; see Debt

Davie, William R., poUtics of, 39

Dayton, Jonathan, politics of, 40

Debt, public, and the Constitution,
4; assumption of, 114; declared
to be largely fictitious, 139 ; plans
to scale down, 141 ff. ; defeated,
146 ; concentration principally
in the North, 392 f . ; endangered
by war with Great Britain, 277 ;
a tax on land and labor, 334 ff.

Debts, British, and domestic poli-
tics, 270 ff.

Delaware, attack on fiscal party in,
359

Democracy, Federalist attack on,
234 ; impossibility of, 312 ff. ; see
Jefferson

Democratic societies, attack whiskey
tax, 258 ; debate on, in House,
259 ff.

Dickinson, John, politics of, 41

Direct government. Federalist at-
tack on, 235 ; see Jefferson
Discrimination, defeat of, 177
Dwight, Timothy, attacks on Jef-
ferson's irreUgion, 365

Economic interpretation of politics
by John Adams, 300 ff . ; see
Taylor and Jefferson

Elections, 1800 a turning point, 15 ;
distribution of vote in Massa-
chusetts, 16 ; statistics of, 28 f . ;
first under the Constitution, 86 ff.,
94 ; meagre vote, 99 ; battle of
1800, 353 ff. ; results of 1800,
378 ff.

Ellsworth, Oliver, poUtics of, 41, 99

Expenditures, public, increased dur-
ing FederaUst administrations,
355

Farmers, oppose capitalistic meth-
ods, 214 ; see Agriculture

Fauchet, analysis of the economic
conflict, 217 ff.

Federalists, Libby on origin, 12 ff. ;
in Massachusetts in 1800, 16 ;
New York, 17 ; and advocates of
the Constitution, 73 ; their analy-
sis of the party conflict, 221 ff. ;
and the election negotiations of
1800, 402 ff. ; view on govern-
ment compared with Jefferson's,
4.50 ff. ; see Hamilton and Jef-
ferson

Few, WiUiam, politics of, 42, 99

Fitzsimons, Thomas, politics of, 42,
99

Franklin, Benjamin, 42

Funding, opposition to, 134; as
origin of parties, 110; see Debt

Fur trade, and politics, 279

Gallatin, Albert, and opposition to
whiskey tax, 256 ; and the elec-
tion negotiations of 1800, 413
Georgia, and security holding, 193
Gerry, Elbridge, politics of, 43, 99 ;

indorses Hamilton's plans, 156
Gilman, Nicholas, politics of, 44, 99
Gorham, Nathaniel, politics of, 44

INDEX

471

Government, federal, and the mon-
eyed interest, 138 ; moneyed in-
terest to support, 149 ff., 154;
based on moneyed interest, 224

Hamilton, on nature of conflict over
the Constitution, 5 ; fiscal meas-
ures and political parties, 13 ff. ;
votes to censure, 21 ; polities of,
44 ; characterization of Anti-
Federalists as opponents of the
Constitution, 76, 93 ; urges Wash-
ington to accept presidency, 89 ff . ;
Jefferson on his system, 112; on
origin of parties, 112; the ele-
ments of his policies, 113 ff . ; the
eonstitutionaUty of the bank, 159 ;
on origin of parties, 245 ; views
war with Great Britain with
alarm, 278 ff. ; on Jay treaty,
285 ff. ; extraordinary request
of Governor Jay, 369 ff. ; and the
election contest of 1800, 405 ff. ;
finds Jefferson's fiscal policy satis-
factory, 448 f .

Hildreth, on the nature of the con-
stitutional conflict, 2, 7

House of Representatives, see Con-
gress ; first elections for, 28 ; first
elections, 96 ff. ; composition of,
99 ; security holders in, 180

Houston, W. C, 45

Houstoun, W., 45

Ingersoll, Jared, politics of, 45

Jackson, opposition to capitaUstic
methods, 133, 136 ff. ; opposes
assumption, 147 ff. ; opposes
bank, 153

Jay treaty, economies of, 268 ff.

Jefferson, early efforts to found
party, 13 ; relation to party divi-
sions, 14 ; on the Constitution,
83; on origin of parties, 110 ff. ;
the constitutionality of the bank,
159 ; denounces the speculators,
165 ff. ; on origin of parties, 174 ;
economic view denounced by
FederaUsts, 226 ; Notes on Vir-
ginia, 358, 422 f . ; letter to Maz-

zei, 358; on the whiskey rebel-
lion, 264 ff. ; views on slavery,
376 ; and the election contest of
1800, 401 ff. ; Hamilton's analysis
of, 406 f ; economic interpretation
of his politics, 415 ff. ; analysis
of causes of party conflict, 417 ff. ;
majority rule, 420 ; views the
Republicans as the landed inter-
est, 421 ff. ; condemns capitalism
and artisans, 424 ff. ; his antip-
athy towards the capitalists,
428 ff. ; letter to Mazzei, 430;
economic aspects of his foreign
poUey, 432 ; directs his attention
to the agricultural interest as
President, 436 ff. ; presidential
policies, 437 ff. ; compromise with
capitahsm, 440 ff. ; his message
of 1801 revised by Levi Lincoln,
442 ff. ; use of public funds to
build up RepubUean moneyed
machine, 444 ff . ; fiscal policy
indorsed by Hamilton, 448 ; sup-
posed divergence from Federalist
views on government, 450 ff. ;
proposal to declare law unconsti-
tutional, 454 ; views on suffrage,
457 ff . ; distrust of legislatures and
popular despotism, 458 ff.

Jeffersonians and enemies of the
Constitution, 78

Jenifer, Daniel, 46

Johnson, W. S., poUtics of, 46, 99

Judicial control over legislation,
favored by Paterson, 56 ; by
Jefferson, 458 n.

Judiciary, RepubUean attacks on,
59 ; federal, early personnel,
103 f.

King, Rufus, politics of, 47, 99

Labor, supply of, 127 ; robbed by
Hamilton's fiscal measures, 207 ;
and poUtics, 246 n. ; and slavery,
247 ; robbed by capitahsm, 328 ff. ;
and land, 349

Land, speculation in, 114; value
of, 125 ; speculations, French re-
marks upon, 218 ; speculation,

472

INDEX

and the Jay treaty, 277 n. ;
robbed by capitalism, 328 ; see
Agriculture
Langdon, John, politics of, 47, 99
Lansing, John, politics of, 48
Libby, O. G., work on the Constitu-
tion cited, 9 ; views on early
parties discussed, 12 ff.
Livingston, William, 48

Maelay, denounces speculators,

167 ff.
Madison, on party divisions, 26 ;
polities of, 51, 99; favors dis-
crimination in payment of debt,
142 ff. ; holds the bank uncon-
stitutional, 158 ; attack on the
stockjobbers, 168
Majority rule, dangers of discussed

by John Adams, 305 ff.
Manufactures, Hamilton's report on,
119; his connections with, 129;
see Capitalism and Hamilton
Marshall, John, on the nature of the
constitutional conflict, 1 ; on the
origin of parties, 109, 237 ff. ; on
the bank, 159
Martin, Alexander, politics of, 52
Martin, Luther, politics of, 52
Maryland, first elections under the
Constitution, 98 ; and security
holding, 188 ; election of 1800 in,
389
Mason, George, politics of, 53
Massachusetts, first elections under
the Constitution, 96 ; and secur-
ity holding, 182 ; attacks on
enemies of fiscal system, 359 ff. ;
results of the election of 1800,
380 ff.
Mazzei, Jefferson's letter to, 430
McClurg, James, 48
McHenry, James, politics of, 48
Mercer, John, politics of, 53 ; esti-
mates relative value of land and
capital, 220
Mifflin, Thomas, politics of, 54
Money, paper, 114, 116, 124
Moneyed interest, rules in the
United States, 208 ff. ; and gov-
ernment, 342

Morris, Gouverneur, politics of, 54
Morris, Robert, politics of, 55, 99;
and security holding, 186

New England, Federalism and
wealth in, 16

New Hampshire and security hold-
ing, 181

New Jersey, first elections under the
Constitution, 97 ; and security
holding, 184

New York, election of 1800 in, 17 ;
first elections under the Consti-
tution, 97 ; and security holding,
183 ; economics of the conflict of
1800 in, 366.

New York City, vote in, 29 ; party
divisions in, 30; economics of the
vote of 1800 in, 383 ff.

Non-intercourse with Great Britain,
21 ; Hamilton on, 22 f . ; proposed,
274 ff.

North and South, conflict between,
126

North, opposition to South, 151 ;
supposed opposition to South,
229, 242

North Carolina, and security hold-
ing, 190; results of election of
1800, 390

Pamphlets, Republican, 196 n.

Parties, early views as to existence
of, 32 ; MarshaU on origin of, 109,
237; Jefferson on, 110; Ames
on source of, 242 ff. ; Hamilton
on, 245 ; Taylor, on the origin of,
344 ff. ; see Jefferson and Hamil-
ton

Party conflict viewed by contem-
poraries, 196 ff.

Party, definition of, 19

Paterson, William, politics of, 55,
99

Pennsylvania, first elections under
the Constitution, 97 ; opposition
to whiskey tax, 251 ; insurrection
in, 255 ff. ; and security holding,
185 ; economic conflict in 1800 in,
373 f. ; election of 1800 in, 387 f.

Pierce, William, 56

INDEX

473

Pinckney, Charles, politics of, 56;

attacks the moneyed interest,

215
Pinckney, C. C, politics of, 57
Protection, see Tariff

Randolph, Edmund, politics of, 59
Read, George, politics of, 60, 99
Republicans, view party conflict as

economic, 196 ff. ; captured by

moneyed interest, 345 ff. ; see

Jefferson
Revenues, federal, and politics, 25
Rhode Island, political conflict in

1800 in, 379
Rutledge, John, politics of, 61

Security holders and polities, 79 ff. ;
in Congress, 166 ff. ; and foreign
politics, 280 ff. ; Taylor's attack
on, 198 ff. ; Taylor's list in Con-
gress, 292

Sedgwick, favors the bank, 155

Senate, federal, security holders in,
179

Shays, Daniel, Republicans com-
pared to, 228

Sherman, Roger, politics of, 61

Sinking fund, 114; Hamilton's use
of, 204

Smith, General, and the negotia-
tions with Jefferson in 1800, 409
ff.

South, opposition to North, 126,
151 ; few security holders in, 151 ;
economic interest opposed to
strong government, 234 ; eco-
nomic interests of, 229, 242 ; op-
position to excise, 250 ff. ; eco-
nomic interests mainly agrarian,
397 ff. ; natural aristocracy of,
398

South Carolina, first elections under
the Constitution, 98; and se-
curity holding, 192; conflict be-
tween agrarians and capitalists
in, 373 ff. ; results of election of
1800, 390

Spaight, Richard, politics of, 62

Speculation, and polities, 165 ff. ;
see Debt

Stockjobbing, 165 ff. ; and the
whiskey insurrection, 256; criti-
cism resented by Fisher Ames,
239 n. ; in Congress, 333 ; see
Security holders
Strong, Caleb, politics of, 62, 99
Suffrage, limitations on, 236
Supreme Court, composition of the
first, 102

Tariff, protective, a part of Hamil-
ton's system, 114, 119; debate
on in first Congress, 162 ff. ; a tax
on land and labor, 339

Tax, direct, opposed in South as
a discrimination against land,
215

Taxation, Anti-Federalist resistance
to, 248 ff.

Taylor, John, characterization of
Repubhcans as friends of the
Constitution, 77 ; examination of
his pamphlets, 197 ff . ; views
partisan conflict as economic
in character, 198 ff. ; attack on
the security holders, 198 ; his list
of security holders, 292; attack
on the bank, 207 ff. ; examina-
tion of his treatise on the gov-
ernment of the United States,
322 ff.

Tennessee, admission of, and poli-
tics, 24

Tonnage duties, 23

Vermont, attack on the fiscal party
in, 358

Virginia, first elections under the
Constitution, 98 ; protest against
funding system, 124, 216; and
security holding, 189; British
debts of, 272, 296 ff. ; and loss of
slaves in Revolution, 273; re-
sults of the election of 1800, 389 f.

Washington, on the economic na-
ture of the Constitution, 4;
parties during his administra-
tion, 12 ff. ; poHtics of, 62 ; sup-
port of Hamilton's policies, 63 ff. ;
attitude toward Jefferson's views,

474

INDEX

64 ; federal patronage, 66 ; con-
tempt for Democrats, 68 ; plea
to Patrick Henry, 69 ; anxiety
over elections, 87 ff. ; land specu-
lations of, 175 n. ; denounces
Democratic societies, 259 ff. ;
name used by Federalists to dis-
concert Republicans, 262

Washington, city of, location traded
for assumption of state debts, 172
Whiskey rebellion, 248 ff.
Williamson, Hugh, politics of, 71
Wilson, James, poUtics of, 72
Wythe, George, politics of, 72

Yates, Robert, politics of, 72

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